Calculate the Effective Annual Interest Rate Corresponding to 12% P

question 2

Multiple Choice

Calculate the effective annual interest rate corresponding to 12% p.a. ,compounded quarterly.

• A)11.9%
• B)12.55%
• C)12.45%
• D)12.71%

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Definitions:

Foreign Exchange Differences

The discrepancies arising when converting foreign currency transactions to a company's functional currency, due to changes in exchange rates.

Reporting Period

A reporting period is the span of time covered by a set of financial statements or reports, typically a quarter or a year.

Exchange Difference

The difference resulting from translating a certain amount of one currency into another at different exchange rates.

Remeasurement

The process of adjusting the carrying value of a financial instrument or asset to reflect its current value or changes in market conditions.