Effective Interest Rates

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

• 2.50%

• 2.51%

• 2.52%

• 2.53%

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

• 2.43%

• 2.46%

• 2.49%

• 2.53%

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

• 2.61%

• 2.63%

• 2.65%

• 2.67%

Liam 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

Which bank should Liam choose?

• Metro Bank

• BPI

• BDO

• China Bank

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

• Compounding Frequency

• Time

• Rate

• Interest

Determine the effective rate of an investment at 9% compounded quarterly.

• 9.31%

• 0.091%

• 9.031%

• 91.31%

What interest rate, compounded quarterly, has an effective rate of 15%?

• 0.001422

• 0.1422

• 1.4223

• 0.01422

Find the effective annual rate of 8.5% compounded quarterly.

• 87.7%

• 8.73%

• 8.07%

• 8.77%