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Questions and Answers
What is the difference between ordinary simple interest and exact simple interest?
What is the difference between ordinary simple interest and exact simple interest?
- The treatment of accrued interest from previous periods
- The method of compounding interest
- The frequency of interest payments
- The number of days in a year used for calculation (correct)
What is the difference between nominal rate of interest and effective rate of interest?
What is the difference between nominal rate of interest and effective rate of interest?
- The inclusion of accrued interest
- The frequency of compounding (correct)
- The treatment of leap years
- The calculation method for interest
What is continuous compounding of interest based on?
What is continuous compounding of interest based on?
- Frequency of principal adjustments
- Exact number of days in a year
- Assumption of annual cash payments
- Compounding throughout the year (correct)
In annuity, what is the key difference between ordinary annuity and deferred annuity?
In annuity, what is the key difference between ordinary annuity and deferred annuity?
What distinguishes an annuity due from other types of annuities?
What distinguishes an annuity due from other types of annuities?
What type of money is derived from its inherent worth as a physical commodity?
What type of money is derived from its inherent worth as a physical commodity?
Which type of money is initially backed by precious metals and then evolved to represent assets like gold reserves or government bonds?
Which type of money is initially backed by precious metals and then evolved to represent assets like gold reserves or government bonds?
What type of currency is not backed by any physical commodity and derives its value from government decree, public trust, and economic stability?
What type of currency is not backed by any physical commodity and derives its value from government decree, public trust, and economic stability?
Which type of money is based on claims on future payments arising from credit extensions and the creditworthiness of the issuer?
Which type of money is based on claims on future payments arising from credit extensions and the creditworthiness of the issuer?
What is the definition of interest in the context of economics?
What is the definition of interest in the context of economics?
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