You have $10

Finance Dec 24, 2020

You have $10.000 deposited in a savings account. The money has been earning an annual rate of 7% interest, compounded quarterly. What is your effective annual rate of interest? 7% 7.1996 7.55% 7.30% 7.65%

Expert Solution

EAR = [(1 +stated rate/no. of compounding periods) ^no. of compounding periods - 1]* 100

? = ((1+7/(4*100))^4-1)*100

Effective Annual Rate% = 7.19

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