define the nominal rate $($

I

NOM

$),$ which also is called the stated rate and the quoted rate. Also define the periodic rate $($

I

PER

$).$ If the nominal rate is $6\%$ and is compounded quarterly, what is the periodic rate $($

I

PER

$)?$ If it is compounded monthly?

$(2)$

If the stated interest rate is constant, will the future value be larger or smaller if we compound an initial amount more often than annually $($for example, semiannually$)?$ Why?

$(3)$

What is the future value of $$100$ after $5$ years under $12\%$ annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding?

$(4)$

What is the effective annual rate $($EFF$\%),$ also called the annual equivalent rate $($AER$)?$ What is the EFF$\%$ for a nominal rate of $12\%,$ compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?

$(5)$

Can the effective annual rate ever be equal to the nominal $($quoted$)$ rate?