Effective Annual Rate

What is the effective annual rate for China Bank if they offer 2.5% per annum compounded semi-annually for a savings deposit?

• 2.53%

• 2.52%

• 2.50%

• 2.51%

Mr. Roweno Gonzales deposits in BDO at 2.4% per annum compounded monthly. What is his effective Annual rate?

• 2.43%

• 2.42%

• 2.46%

• 2.45%

What will be the effective annual rate of Ms. Alfaras' savings if she will deposit in Metro Bank at annual rate of 2.6% compounded quarterly

• 2.64%

• 2.61%

• 2.63%

• 2.65%

Levi Bongosia plans to open a saving account in Maasin City. The 4 banks offers the following rates:

-China Bank offers 0.25% per annum compounded semi-annually

-BDO offers 0.25% per annum compounded monthly

-BPI offers 0.25% per annum compounded annually

-Metro Bank offers 0.25% per annum compounded quarterly

If you were Levi, which bank will you choose?

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It refers to the number of times the interest is compounded on a certain principal in one year.

• Compound Interest

• Time

• Rate

• Compounding Frequency