Asked by zhamiya moore on May 10, 2024
Verified
Is the effective rate of interest ever equal to the nominal interest rate?
Effective Rate of Interest
The actual rate of interest earned or paid on an investment or loan, accounting for the effect of compounding.
Nominal Interest Rate
The rate of interest before adjustment for inflation, representing the face value of financial transactions.
- Assess different financing or investment opportunities through analysis of their effective interest rates.
Verified Answer
SD
Sharissa DarkoahMay 11, 2024
Final Answer :
True
Explanation :
The effective interest rate equals the nominal rate for annual compounding.
Learning Objectives
- Assess different financing or investment opportunities through analysis of their effective interest rates.