Question 741 APR, effective rate
A home loan company advertises an interest rate of 4.5% pa, payable monthly. Which of the following statements about the interest rate is NOT correct?
(a) The APR compounding monthly is 4.5% pa.
(b) The effective monthly rate is 0.3675% pa.
(c) The effective annual rate is 4.594% pa.
(d) The effective 6 month rate is 2.2712% pa.
(e) The APR compounding semi-annually is 4.5424% pa.