What Is the Appropriate Interest Rate to Use When Making

question 36

Multiple Choice

What is the appropriate interest rate to use when making future or present value calculations?

• A) The effective annual interest rate (EAR)
• B) The annual percentage rate (APR)
• C) The quoted interest rate
• D) The simple interest

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Definitions:

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A bookkeeping technique in which each transaction is recorded by entering corresponding and opposite amounts in two different accounts.

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