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Homework answers / question archive / If an investment provides a 0
If an investment provides a 0.78% return monthly, its effective annual rate is?
Computation of the effective annual rate (EAR):-
EAR = (1+APR)^n-1
Here, APR = 0.78% (monthly)
n = 12 periods (monthly)
EAR = (1+0.78%)^12-1
= 1.0977 - 1
= 9.77%
