Question

# Find the APR, or stated rate, in each of the following cases. (Do not round intermediate...

Find the APR, or stated rate, in each of the following cases. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Use 365 days in a year.)

 Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) % Semiannually 14.50 % % Monthly 10.50 % Weekly 10.50 % Daily 8.50

EAR=(1+APR/m)^m-1
where m=compounding periods

1.

0.145=(1+APR/2)^2-1

(1+0.145)=(1+APR/2)^2

(1.145)^(1/2)=(1+APR/2)

APR=[(1.145)^(1/2)-1]*2

=14.01%(Approx).

2.

0.105=(1+APR/12)^12-1

(1+0.105)=(1+APR/12)^12

(1.105)^(1/12)=(1+APR/12)

APR=[(1.105)^(1/12)-1]*12

=10.03%(Approx).

3.

0.105=(1+APR/52)^52-1

(1+0.105)=(1+APR/52)^52

(1.105)^(1/52)=(1+APR/52)

APR=[(1.105)^(1/52)-1]*52

=9.99%(Approx).

4.

0.085=(1+APR/365)^365-1

(1+0.085)=(1+APR/365)^365

(1.085)^(1/365)=(1+APR/365)

APR=[(1.085)^(1/365)-1]*365

=8.16%(Approx).

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