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Evgesh-ka [11]
4 years ago
14

Find the EAR in each of the following cases. (Do not round intermediate calculations and enter your answers as a percent rounded

to 2 decimal places, e.g., 32.16. Use 365 days in a year.)
Stated Rate (APR) Number of Times Compounded Effective Rate (EAR)
9.25 % Quarterly %
16.75 Monthly %
15.25 Daily %
11.25 Semiannually %
Business
1 answer:
inna [77]4 years ago
4 0

EAR = (1 + periodic interest rate)^N - 1

<u>9.25 % Quarterly %</u>

EAR = (1+\frac{0.0925}{4})^{4}  - 1 = 0.09575 or 9.58%

<u>16.75 Monthly % </u>

EAR = (1+\frac{0.1675}{12})^{12}  - 1  = 0.1809766 or 18.10%

<u>15.25 Daily % </u>

EAR = (1+\frac{0.1525}{365})^{365}  - 1  = 0.1647053 or 16.47%

<u>11.25 Semiannually %</u>

EAR = (1+\frac{0.1125}{2})^{2}  - 1  = 0.115664 or 11.57%

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