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Author Question: PWC recently proposed to BMO to change the method of compounding interest on line of credit accounts ... (Read 183 times)

Pineapplelove6

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Question 1

The PC financial is considering changing the method of compounding interest on line of credit accounts to daily compounding. If the current rate is 5.75% compounded quarterly, what nominal rate should PC Financial propose to maintain the same effective rate of interest?
◦ 5.719%
◦ 0.576%
◦ 1.6%
◦ 0.016%
◦ 4.61%

Question 2

PWC recently proposed to BMO to change the method of compounding interest on line of credit accounts to monthly compounding, as part of the marketing campaign. If the current rate is 2.5% compounded quarterly, what nominal rate should the PWC suggest to BMO executives to maintain the same effective rate of interest?
◦ 0.208%
◦ 2.5%
◦ 2.495%
◦ 2.75%
◦ 3.773%


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Marked as best answer by Pineapplelove6 on Jun 6, 2019

BAOCHAU2803

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