PRC-2 · Chapter 4 · Question 33 of 60
If a bank offers an annual nominal rate of 10% compounded 'quarterly', how many times (m) per year is interest added to the principal?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 4
Explanation
Compounded quarterly means the interest is calculated and added every three months, resulting in exactly 4 compounding periods within a single calendar year.
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