Your Company Is Able to Arrange Financing at Either a Rate

question 113

Multiple Choice

Your company is able to arrange financing at either a rate of 12.75% annually,or at a rate of 12% compounded monthly.Assuming financing is needed for one year,which rate is the best?

• A)12% compounded monthly,because the annual percentage yield is 12.68%
• B)Both rates are effectively the same,so your company should be indifferent between the two.
• C)112.75% annually because the annual percentage yield for 12% compounded monthly is greater than 12.75%.
• D)12.75% annually,because even though the annual percentage yield is higher,interest if paid only once per year at year end.

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Definitions:

Amyloplasts

A type of plastid found in some plant cells, responsible for the synthesis and storage of starch granules through the process of photosynthesis.

Root Cap

A protective structure located at the tip of a plant root that shields the growing tip in the soil, secretes mucilage to aid in movement, and perceives gravity.

Phototropin

A protein that acts as a blue-light receptor, causing phototropic responses in plants towards light sources.

Phototropic Response

the growth or movement of a plant organ toward or away from light, as a response to its direction.