Question

Consider a $100 investment paying an EAR of 3.5% what is the equivalent APR compounded monthly?

Consider a $100 investment paying an EAR of 3.5% what is the equivalent APR compounded monthly?

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Answer #1

We know the formula for EAR:

Where,
EAR = Effective annual rate
APR = Annual percentage rate (or nominal rate)
m = Times compounded in a year.

Therefore,

OR

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