Your Bank Account Pays a 5% Nominal Rate of Interest

question 18

Multiple Choice

Your bank account pays a 5% nominal rate of interest.The interest is compounded quarterly.Which of the following statements is CORRECT?

• A) The periodic rate of interest is 5% and the effective rate of interest is also 5%.
• B) The periodic rate of interest is 1.25% and the effective rate of interest is 2.5%.
• C) The periodic rate of interest is 5% and the effective rate of interest is greater than 5%.
• D) The periodic rate of interest is 1.25% and the effective rate of interest is greater than 5%.
• E) The periodic rate of interest is 2.5% and the effective rate of interest is 5%.

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Definitions:

Cytoplasm

The gel-like substance inside a cell, excluding the nucleus, where most cellular activities occur.

Muscle Fiber

An individual muscle cell, known for its elongated shape, that contracts to produce force and movement.

Sarcoplasm

A type of cytoplasm found in muscle cells, rich in stored lipids, glycogen, and the proteins necessary for muscle contraction.

Intercalated Discs

Specialized structures located at the cell boundaries in cardiac muscle fibers that facilitate the coordinated contraction of the heart muscle.