Chapter 4 Nominal and Effective Interest Rates
year, compounded monthly, or 4.5% per quarter, compounded monthly. An effective interest rate . is a rate wherein the . i. compounding of interest is taken into account. For. example, 10% per year, compounded monthly, or 12% per year, compounded weekly. If the CP is not mentioned, it is the same as the time period mentioned with the interest rate. ................
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