Probleman investment opportunity promises a stated interest, Ask an Expert

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Problem:

An investment opportunity promises a stated interest rate of 6 percent with semiannual compounding. Which of the following statements is most correct?

A. The periodic rate is greater than 3 percent.

B. The periodic rate is less than 3 percent.

C. The effective annual rate is less than 6 percent.

D. The effective annual rate is greater than 6 percent.

E. The effective annual rate is 6 percent.

Justify your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91145646

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