Question

Question 17 1 pts If we calculate a periodic interest rate, say a monthly rate, in order to get the simple annual rate, we can multiply the periodic rate by the number of periods within a year. True O False

Answer 1

ANSWER : TRUE

   WHAT IS PERIODIC INTEREST ?

The periodic interest rate means the interest rate over a specific period of time.

The period rate helps you figure out how much interest accrues when interest compounds on a loan more than once per year.

It also helps you figure out the interest when you take out a loan for less than a year, such as carrying a balance on your credit card.

SIMPLE ANNUAL RATE:

Simple interest is a type of interest that is applied to the amount borrowed or invested for the entire duration of the loan, without taking any other factors into account, such as past interest (paid or charged) or any other financial considerations. Simple interest is generally applied to short-term loans, usually one year or less, that are administered by financial companies

. The same applies to money invested for a similarly short period of time.

The simple interest rate is a ratio and is typically expressed as a percentage.

It plays an important role in determining the amount of interest on a loan or investment.

The amount of interest charged or earned depends on three important quantities that we will examine next.

CONCLUSION:

TO FIND A SIMPLE ANNUAL RATE ,WE CAN MULTIPLY THE PERIODIC RATE WITH THE NUMBER OF PERIODS WITHIN A YEAR