What is the annual compounded interest rate of an investment with a stated interest rate of 6% compounded quarterly

What is the annual compounded interest rate of an investment with a stated interest rate of 6% compounded quarterly for seven years (round to the nearest .1%)?

A) 51.7%

B) 6.7%

C) 10.9%

D) 6.1%

Which of the following provides the greatest annual interest?

A) 10% compounded annually

B) 9.5% compounded monthly

C) 9% compounded quarterly

D) 8.5% compounded daily

The effective annual rate increases when the ________ increases.

A) number of compounding periods in a year

B) number of years invested

C) quoted rate

D) both A and C

E) all of the above

You are considering two investments. Investment A yields 10% compounded quarterly. Investment B yields r% compounded semiannually. Both investments have equal annual yields. Find r.

A) 19.875%

B) 10%

C) 10.38%

D) 10.125%

The annual percentage rate (APR) is calculated as which of the following?

A) Interest rate per period x compounding periods per year

B) (1+quoted annual rate/compounding periods per year)compounding periods per year-1

C) Interest rate per period / compounding periods per year

D) 1+quoted annual rate/compounding periods per year)1/compounding periods per year-1

For any number of compounding periods per year greater than 1, EAR will always be greater than the APR.

Answer:  TRUE

As the number of compounding periods per year increase, the annual percentage rate of interest increases.

Answer:  FALSE

A monthly credit card interest rate of 1.5% is equal to and effective annual rate of 19.56%

Answer:  TRUE

The annual percentage rate on two different investments will equal the effective annual rate on the two investments only if interest on both investments is compounded annually.

Answer:  TRUE