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Homework answers / question archive / Find the EAR for the stated rate (APR) of 9
Find the EAR for the stated rate (APR) of 9.9 percent compounded quarterly. (round final percentage 2 decimal places)
Computation of the effective annual rate (EAR):-
EAR = (1+APR/n)^n-1
Here,
n = 4 periods (quarterly)
EAR = (1+9.9%/4)^4 -1
= (1.02475^4) -1
= 1.1027 - 1
= 10.27%
