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Question: Find the EAR in each of the following cases (Use 365 days a year. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)):

Find the EAR in each of the following cases (Use 365 days a year. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)):

Stated Rate (APR)Number of Times CompoundedEffective Rate (EAR)
8.3%Quarterly%
17.3Monthly    
13.3Daily    
10.3Infinite    

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Answer:
Effective annual rate (EAR) can be calculated using the following formula Number of periods Annual rate EffectiveAnnual Rate
when the APR is 17.3% and, compounding is monthly The number of periods will be 12. Calculate the EAR as follows: Annual rate

when the APR is 13.3% and, compounding is Daily The number of days in a year is 365. Calculate the EAR as follows: Number of

When the APR is 10.3% and, compounding is infinite In case of continuous compounding, EAR is calculated using the following f

Faq:
*** how can I solve this using excel?

You can use EFFECT function on excel. For example: In case of 8.3% APR, quarterly compounding, type =effect(8.3%,4) in excel workbook.

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