At interest rate of 3% per quarter, the closest nominal interest rate per year is: Less...

Question

Question

Answer 1

Answer #1

Nominal interest = rate * number of periods

=3% * 4 quarters

=12%

Answer: higher than 9.5%

Add a comment

Answer 2

Similar Homework Help Questions

1. If the nominal interest rate of is 2% per quarter, what is the nominal rate...

1. If the nominal interest rate of is 2% per quarter, what is the nominal rate per year ? 2. $100 of interest is paid each month on an investment of $10000, if the interest is compounded monthly at the end of 2 years, what is the accumulation at the end of two years ? 3. An individual wishes to deposit an amount of money now to have an accumulation of $500 at the end of five years. If the...
1. If the nominal interest rate of is 2% per quarter, what is the nominal rate...

1. If the nominal interest rate of is 2% per quarter, what is the nominal rate per year? A) 0.5% B) 8% C) 16% D) 4% 2. $100 of interest is paid each month on an investment of $10000, if the interest is compounded monthly at the end of 2 years, what is the accumulation at the end of two years ? A) $12,544 B) $12,700 C) $12,400 D) $12,400 3. An individual wishes to deposit an amount of money...
When the real rate of interest is less than the nominal rate of interest, then: A....

When the real rate of interest is less than the nominal rate of interest, then: A. inflation must be added to the nominal rate. B. investment returns do not increase purchasing power. C. nominal flows should be discounted with real rates. D. inflation is expected to occur.

A credit card issued through Frost Bank has a nominal interest rate of 3.5% per quarter,...

A credit card issued through Frost Bank has a nominal interest rate of 3.5% per quarter, and the compounding period is quarterly. Calculate the effective interest rate on a (a) semiannual basis, and (b) annual basis
An investment of $2,000 is made and the interest rate is 1.5% per quarter. At the...

An investment of $2,000 is made and the interest rate is 1.5% per quarter. At the end of a year, determine the total amount available if: (a) simple interest is used. (b) discrete compound interest is used. (c) continuous compound interest is used. (d) the nominal interest rate. (e) the effective discrete compound interest rate. (f) the effective continuous compound interest rate.
3 pts $12,000 is deposited in a bank account that pays 8% nominal interest per year....

3 pts $12,000 is deposited in a bank account that pays 8% nominal interest per year. (a) How long does it take for the account to reach $42,500, if interest compounds quarterly? O 14 years O 16 yeans D Question 2 3 pts (b) What nominal annual interest would be required for the account to reach $30,000 in 10 years, if interest compounds monthly? 8.5%/year 92%/year

Problem 4 - If interest rate is 15% per year. Find the nominal interest rate equivalent...

Problem 4 - If interest rate is 15% per year. Find the nominal interest rate equivalent to 15% if: 1. Compounding is every three months (quarterly) 2. Compounded hourly 3. Compounded continuously Note: Use 4 decimal points like 15.3542%
Determine the periodic interest rate for a nominal interest rate of 2.7% compounded: (Round your answers...

Determine the periodic interest rate for a nominal interest rate of 2.7% compounded: (Round your answers to 2 decimal places.) a. Semiannually. % per half-year b. Quarterly % per quarter c. Monthly % per month
What effective interest rate per year, compounded continuously, is equivalent to a nominal rate of 15%...

What effective interest rate per year, compounded continuously, is equivalent to a nominal rate of 15% per year? Express your answer as a %.

When the nominal interest rate is____ the equilibrium interest rate, the quanity of money demanded is...

When the nominal interest rate is____ the equilibrium interest rate, the quanity of money demanded is less than the quanity of money supplied; when the nominal interest rate is______ the equilbrium interest rate, the quanity of money demanded exceeds the quanity of money supplied A) greater than; less than B) greater than; equal to C) less than; greater than D) equal to; greater than