Min is very clever and is helping you to understand finance. With interest rates so high, she has decided to start your finance lessons by teaching you about interest rates. Which statement is incorrect?
a. The calculation of simple interest is equal to the principal amount multiplied by the interest rate, multiplied by the number of periods.
b. The nominal interest rate is the stated or quoted rate of interest.
c. Nominal interest rate of 8.50% compounded quarterly is equivalent to the effective interest rate of 8.85%
d. The effective interest rate takes the compounding period into account and is a more accurate measure of interest charges.
e. For a borrower, simple interest is advantageous; for a lender, compound interest is more advantageous.