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nekit [7.7K]
3 years ago
13

What is the effective annual rate​ (EAR)?

Business
2 answers:
Musya8 [376]3 years ago
7 0

Answer: The effective annual rate​ (EAR) is<u><em> the interest rate that would earn the same interest with annual compounding.</em></u>

The Effective Annual Rate (EAR) is know as the interest rate earned on a subject/asset or remunerated on a borrowing as a consequence of compounding interest over period of time.

The formula to compute effective annual rate is as follow:

Effective Annual Rate = [1 + \frac{interest rate}{compounding periods}]^{time periods} - 1

<u><em /></u>

<u><em>∴ Option (c) is correct.</em></u>

Furkat [3]3 years ago
6 0

Answer:

The correct option here is C) .

Explanation:

The EAR (effective annual interest rate) which is also know as annual equivalent rate, is the interest rate which is either earned or it is paid on a loan or an investment or any financial product because of the compounding done over a defined period of time. This rate comes in very handy when one has to compare different products like loans or certificate of deposits.

FORMULA -

= ( 1 + i / n )^n - 1

where i  = interest rate(NOMINAL ) and n = number of periods

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A higher earnings per share (eps) does not necessarily translate into a higher stock price
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This doesn't seem to be a question, but rather, a statement.
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Two people see the same thing at the same time yet interpret it differently. In this situation, factors that operate to shape th
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The answer is A) perceivers

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3 years ago
For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 de
snow_lady [41]

Explanation:

The computation of the future value is shown below:

As we know that

Future value = Present value × (1 + interest rate)^number of years

In the first case,

Future value = $2,050 × (1 + 0.12)^12

                     = $2,050 × 3.895975993

                     = $7,986.75

In the second case,

Future value = $8,352 × (1 + 0.10)^6

                     = $8,352 × 1.771561

                     = $14,796.08

In the third case,

Future value =  $72,355× (1 + 0.11)^13

                     = $72,355 × 3.883280163

                     = $280,974.74

In the fourth case,

Future value = $179,796 × (1 + 0.07)^7

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Answer:

Adding up basic monthly expenses and subtracting this total from take-home pay, plus trying to find out ways or figuring out what to give up to make the monthly loan payment.

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