If information is given abou months: 2. t annual interest rate and years an inve

Question

If information is given abou months: 2. t annual interest rate and years an investment lasts, but payments arc in Select one: a. You multiply the annual interest rate by 12 to get RATE and divide the years by 12 to get NPEIR Cb. You multiply the annual interest rate by 12 to get RATE and multiply the years by 12 to get NPER c. You divide the annual interest rate by 12 to get RATE and divide the years by 12 to get NPER d. You divide the annual interest rate by 12 to get RATE and multiply the years by 1 2 to get NPER

Explanation / Answer

Ans:

Option d is correct.

You divide the annual interest rate by 12 to get RATE and multiply the years by 12 to get NPER.

As,payment is in months,so we have to get number of months from the number of years,so we will multiply number of years by 12.

As,payment is in months,so we have to convert the annual interest rate to equivalent monthly interest rate by dividing it by 12.

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