Which of the following statements is CORRECT? a. An investment that has a nominal rate of 6% with semiannual payments wi
Posted: Wed Mar 30, 2022 3:47 pm
Which of the following statements is CORRECT?
a. An investment that has a nominal rate of 6% with semiannual
payments will have an effective rate that is smaller than 6%.
b. The present value of a 3-year, $150 annuity due will exceed
the present value of a 3-year, $150 ordinary annuity.
c. If a loan has a nominal annual rate of 8%, then the effective
rate can never be greater than 8%
d. The proportion of the payment that goes toward interest on a
fully amortized loan increases over time.
e. If a loan or investment has annual payments, then the
effective, periodic, and nominal rates of interest will be all be
different.
a. An investment that has a nominal rate of 6% with semiannual
payments will have an effective rate that is smaller than 6%.
b. The present value of a 3-year, $150 annuity due will exceed
the present value of a 3-year, $150 ordinary annuity.
c. If a loan has a nominal annual rate of 8%, then the effective
rate can never be greater than 8%
d. The proportion of the payment that goes toward interest on a
fully amortized loan increases over time.
e. If a loan or investment has annual payments, then the
effective, periodic, and nominal rates of interest will be all be
different.