An 8% APR with Monthly Compounding Is Closest to Which

question 62

Multiple Choice

An 8% APR with monthly compounding is closest to which of the following?

• A)an EAR of 6.7%
• B)an EAR of 7.72%
• C)an EAR of 8.3%
• D)an EAR of 8.5%
• E)an EAR of 9.14%

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Definitions:

Frictional Unemployment

Short-term unemployment that arises from the process of workers moving between jobs, including fresh entrants to the labor market.

Labor Unions

Organizations formed by workers from related fields that work for the collective rights of the members, including better wages, working conditions, and benefits.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate.

Wages

Payments made to workers for their labor, typically calculated on an hourly, daily, or piecework basis.