What Is the Annually Compounded Rate of Interest on an Account

question 43

Multiple Choice

What is the annually compounded rate of interest on an account with an APR of 10% and monthly compounding?

• A) 10.00%
• B) 10.47%
• C) 10.52%
• D) 11.05%

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Definitions:

MPC

The marginal propensity to consume, which represents the portion of additional income that a household spends on consumption instead of saving.

Multiplier

In economics, a factor by which a change in one economic variable, such as spending, leads to a greater change in another variable, such as GDP.

Nondiscretionary Fiscal Policy

involves automatic stabilizers that adjust government spending and taxes without the need for new legislation, helping to moderate the business cycle.

National Defense

The governmental activities and structures designed to protect a country from external threats and ensure its security.