The annual percentage rate incorporates interest compounding in the computation, but the effective annual rate does not. Both computations adjust the percentage cost per period so that it is stated on an annual basis.?
Answer the following statement true (T) or false (F)
False
The effective annual rate incorporates interest compounding in the computation, but the annual percentage rate does not. Both computations adjust the percentage cost per period so that it is stated on an annual basis. See 14-5: Computing the Cost of Short-Term Credit
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