Question: Consider the difference between the annual interest rate and the effective interest rate. As the number of compounding periods per year increases so does the

Consider the difference between the annual interest rate and the effective interest rate. As the number of compounding periods per year increases so does the difference between the effective interest rate and the annual interest rate. Consider the difference between the annual interest rate and the effective interest rate. As the number of compounding periods per year increases so does the difference between the effective interest rate and the annual interest rate.

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