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Corporate Finance

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Calculting the Periodic Interest Rate

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The formula to calculate the periodic interest rate and express it as a percentage is to divide the annual interest rate by the number of periods and then multiply it by 100 to convert to a percentage.

Why would this be necessary for business and/or finance? Select ALL that apply.

A

To assess monthly interest rates on a credit card.

B

To calculate semi-annual interest receipts on a bond issue.

C

To determine quarterly interest expenses on a business loan.

D

To determine the marketability of an investment.