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1. What is the effective rate of interest of a lump that is compounded quarterly at 12% annually?
- A. 10.25%
- B. 10.25%
- C. 10.25%
- D. 10.25%
Answer: Option B
Explanation:
F=(1+.12/4)^4-1
=(1.03)^4-1
=1.1255-1
=.1255×100
=12.55
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