Student Center | Instructor Center | Information Center | Home

Engineering Economy, 5/e

Leland Blank, Texas A&M University
Anthony Tarquin, University of Texas - El Paso

Nominal and Effective Interest Rates

Matching Quiz

Select the correct answers on the left to fill in the blanks on the right. There are more answers than questions, therefore, some of the items on the right will remain unused. When you have completed the quiz, click the SUBMIT button at the bottom.


1				When no compounding period is stated with an interest rate, the interest is assumed to be compounded over the _______________.


2				When the compounding period is given without the interest rate identified as either nominal or effective, it is assumed to be a (an) _____________________.


3				The time period over which payments or receipts occur is known as the ________________.


4				The m in the effective interest rate equation is always equal to the number of times interest is compounded during the period over which the ________________ is desired.


4				There are an infinite number of correct interest rate-time period combinations possible when only ____________ factors are involved.


5				Continuous compounding means the ______________ approaches the limit of infinity.

Answer choices for questions 1 through 5

A)	Payment period
B)	Single payment
C)	Capital recovery
D)	Compounding period
E)	Varying interest rate
F)	Equivalence relation
G)	Nominal rate
H)	Number of interest periods
I)	Interest period
J)	Effective interest rate
K)	Compounding of interest

2002 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.