Would a Depositor Prefer an APR of 8% with Monthly

question 29

Multiple Choice

Would a depositor prefer an APR of 8% with monthly compounding or an APR of 8.5% with semiannual compounding?

• A) 8.0% with monthly compounding
• B) 8.5% with semiannual compounding
• C) The depositor would be indifferent.
• D) The time period must be known to select the preferred account.

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Definitions:

Variable Allowance

Refers to the additional time factored into tasks or jobs to account for various unpredictable factors that could affect the time required to complete a task.

Rubber Gasket

A mechanical seal that fills the space between two or more mating surfaces, generally to prevent leakage from or into the joined objects while under compression.

Pneumatic Wrench

A tool powered by compressed air used for tightening or loosening nuts and bolts with high torque.

Normal Time

The amount of time that should be required to complete a task under normal working conditions, without any delays.