Find the EAR in each of the following cases (Use 365 days a year. Do not round i

Question

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

Stated Rate (APR)

Number of Times Compounded

Effective Rate (EAR)

9.1

%

Quarterly

%

18.1

Monthly

   

14.1

Daily

   

11.1

Infinite

   

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

Explanation / Answer

Stated Rate (APR)

Number of Times Compounded

Effective Rate (EAR)

9.1

Quarterly

(1 + 0 .091 / 4) 4 1

0.0941 or 9.41%

18.1

Monthly

     (1 + 0 .181 / 12 ) 12 1

0.1967 or 19.67%

14.1

Daily

     (1 + 0 .141 / 365) 365 1

0.1513 or 15.13%

11.1

Infinite

   e0.111 1

0.1173 or 11.73%

Stated Rate (APR)

Number of Times Compounded

Effective Rate (EAR)

9.1

Quarterly

(1 + 0 .091 / 4) 4 1

0.0941 or 9.41%

18.1

Monthly

     (1 + 0 .181 / 12 ) 12 1

0.1967 or 19.67%

14.1

Daily

     (1 + 0 .141 / 365) 365 1

0.1513 or 15.13%

11.1

Infinite

   e0.111 1

0.1173 or 11.73%

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