The Stated Interest Rate on Your Account Is 7

question 165

Multiple Choice

The stated interest rate on your account is 7.12%,interest paid semi-annually.Your effective rate of interest (APY) will be

• A) lower than 7.12%
• B) equal to 7.12%.
• C) greater than 7.12%
• D) depends if the compounding takes place within the same year.
• E) none of these.

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Definitions:

Degrees of Freedom

Degrees of freedom refer to the number of values in a statistical calculation that are free to vary without violating the constraints of the calculation.

Population Standard Deviation

A measure of the dispersion or variability within a population data set, indicating how spread out the data points are from the mean.

Interval Estimate

An estimate of a population parameter that gives an interval believed to contain the parameter.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution without violating any constraints.