Nominal and Effective Interest Rates - University of Florida
Nominal and Effective Interest Rates
Given the bank offers 12% compounded monthly, find:
1) Monthly effective and nominal interest rates (1%, 1%).
2) Two-month (nominal) rate compounded monthly (2%) and two-month effective interest rate (2.01%).
3) Quarterly (nominal) rate compounded monthly (3%) and quarterly effective interest rate (3.03%).
4) Semiannual (nominal) rate compounded monthly (6%) and semi-annual effective interest rate (6.15%).
5) Semiannual (nominal) rate compounded quarterly (6.06%) and semi-annual effective interest rate (6.15%).
6) Nine-month (nominal) rate compounded monthly (9%) and nine-month effective interest rate (9.36%).
7) Nine-month (nominal) rate compounded every three months (9.09%) and nine-month effective interest rate (9.36%).
8) Yearly nominal and effective interest rates (12%, 12.68%).
9) 1½-year (nominal) rate compounded semi-annually (18.46%) and 1½-year effective interest rate (19.6%).
10) Two-year (nominal) rate compounded quarterly (24.24%) and 2-year effective interest rate (26.97%).
11) Three-year (nominal) rate compounded every 1½ years (39.2%) and three-year effective interest rate (43.07%).
In the compounding formulas (ex. (P/F,i,n), (P/A,i,n), etc.), which interest rate (nominal or effective) is appropriate to use? Is this always the case?
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- university of florida graduate certificate
- university of florida certification programs
- university of florida online certifications
- university of florida salary database
- university of florida softball camp
- university of florida 2020 roster
- university of florida hospital north
- university of florida ceeb code
- university of florida online biology
- university of florida biology ranking
- university of florida marine science
- university of florida marine biology