Answer the following statements true (T) or false (F)

1. The annual percentage rate (APR) is the nominal rate of interest, found by multiplying the periodic rate by the number of periods in one year.
2. The annual percentage yield (APY) is the effective rate of interest that must be disclosed to customers by banks on their savings products as a result of "truth in savings laws."
3. The effective rate of interest is the contractual rate of interest charged by a lender or promised by a borrower.
4. The effective rate of interest differs from the nominal rate of interest in that it reflects the impact of compounding frequency.
5. For any interest rate and for any period of time, the more frequently interest is compounded, the greater the amount of money that has to be invested today in order to accumulate a given future amount.


1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. FALSE

Business

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