Relationship between annual nominal & effective rate of interest

Q.  Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one:
- Published on 04 Sep 15

a. Effective rate > Nominal rate
b. Effective rate < Nominal rate
c. Effective rate = Nominal rate
d. None of the above

ANSWER: Effective rate > Nominal rate

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