Question
How is an APR computed?
Multiple choice question.
Rate per period × Number of periods per year
(Rate per period × Number of periods per year) - 1
(1 + Rate per period)Number of periods per year
(1 + Rate per period)Number of periods per year - 1
Multiple choice question.
Rate per period × Number of periods per year
(Rate per period × Number of periods per year) - 1
(1 + Rate per period)Number of periods per year
(1 + Rate per period)Number of periods per year - 1
Answers
GPT-4o mini
The correct answer is:
**(1 + Rate per period)Number of periods per year - 1**
This formula accounts for the compounding effect over the number of periods per year, providing the annual percentage rate (APR) after accounting for compounding.
**(1 + Rate per period)Number of periods per year - 1**
This formula accounts for the compounding effect over the number of periods per year, providing the annual percentage rate (APR) after accounting for compounding.