Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / You see a bank term deposit quoting 5% per annum compounded monthly
You see a bank term deposit quoting 5% per annum compounded monthly. What is the effective annual rate (i.e., the EAR)? Round your answer to two decimal places. a. 5.42% b.4.58% OC. 5.55% d. 5.00% o e. 5.12% QUESTION 11 What is the effective annual rate (EAR)? a. The cash flows from an investment over a one-year period divided by the number of times that interest is compounded during the year. Ob. The interest rate that would earn the same interest with annual compounding. OC. None of the answers are correct. Od. The discount rate for an n-year time interval, where n may be more than one year or less than or equal to one year (a fraction). e. The ratio of the number of the annual percentage rate to the number of compounding periods per year.
Q#10
Effective Annual Rate = 5.12% as follows
Answer is choice e.
Q#11:
Effective annual rate (EAR) is the interest rate that would earn the interest with annual compounding.
Answer is choice b.
please see the attached file for the complet solution.
