Question

Find the APR, or stated rate, in each of the following cases. (Use 365 days in a year. Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).)

Stated Rate (APR) Number of Times
Compounded Effective Rate (EAR)
% Semiannually 13.75 %
% Monthly 9.75
% Weekly 11.25
% Daily 9.25

Answer 1

Answer:

% Semiannually 13.75%  ==> 14,22%

% Monthly 9.75 % ==> 10,20%

% Weekly 11.25%  ==> 11,89%

% Daily 9.25% ==> 9,69%

Explanation:

The stated rate is also known as the annual interest rate. This is the percentage of the yearly return on the investment.

EAR = [ 1 + (APR/m)]^m -1  

m = periods in one year  

% Semiannually 13.75%  a. [ 1 + (.1375/2)]^2 -1    1,068750  14,22%

% Monthly 9.75%     a. [ 1 + (.0975/12)]^12 -1    1,008125  10,20%

% Weekly 11.25%    a. [ 1 + (.1125/52)]^52 -1   1,002163  11,89%

% Daily 9.25%    a. [ 1 + (.0925/365)]^365 -  1,000243  9,27%