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As a Result of Compounding, the Effective Annual Rate on a Bank

question 57

True/False

As a result of compounding, the effective annual rate on a bank deposit (or a loan) is always equal to or greater than the nominal rate on the deposit (or loan).


Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for physical activity by accelerating the heart rate, widening air passages, and other physiological changes.

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord, responsible for transmitting information to and from the central nervous system.

Somatic Nervous System

Part of the peripheral nervous system associated with the voluntary control of body movements through the action of skeletal muscles.

Dissociative Amnesia

A disorder characterized by gaps in memory for personal history, sometimes due to traumatic events or extreme stress.

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