Answer to Question #200985 in Financial Math for mandona

Question

Find the effective rate of interest corresponding to a nominal rate of 6% per year compounded (a) annually, (b) semiannually, (c) quarterly, (d) monthly, and (e) daily. In 1968 Truth in Lending Act passed by Congress requires that the effective rate of interest be disclosed in all contracts involving interest charges, giving consumers a common basis for comparing the various rates quoted by different financial institutions.

Answer 1

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