Would prefer the rate to be compounded more frequently

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Problem 1: You are investing money at 7% annual interest rate. Would you prefer the rate to be compounded more frequently or less frequently? Why?

Problem 2: You are borrowing money at 7% annual nominal interest rate. Would you prefer the rate to be compounded more frequently or less frequently? Why?

Problem 3: Why are effective annual rates generally greater than equivalent nominal interest rates?

Problem 4: What does a loan amortization schedule show? Be specific.

Reference no: EM132841328

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