If Interest on a Savings Account Is Compounded Semiannually,the Effective

question 34

Multiple Choice

If interest on a savings account is compounded semiannually,the effective rate of interest will be

• A)higher than the nominal rate.
• B)lower than the nominal rate.
• C)the same as the simple rate.
• D)equal to the nominal rate.
• E)lower than the simple rate.

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Definitions:

Restatement

The act of expressing the same idea or fact in different words, often to clarify or emphasize.

Clarification

The process of making something clear or understandable by providing more details or simplifying the explanation.

Reflection

Reflection refers to the return of light, heat, sound, or energy from a surface, or the act of serious thought or consideration.

Clarification

A process of making something less confusing or more comprehensible by providing more details or explanation.