ESC 282 Fall 2018 Sectn 50 Mo and Wed Section 50 Homework: Chapter 4 part 2 5 of

Question

ESC 282 Fall 2018 Sectn 50 Mo and Wed Section 50 Homework: Chapter 4 part 2 5 of 8 (5 complete) Score: 0 of 1 pt Problem 4-100 (algorithmic) Find the interest rates in the following situations. a. APR 7%, compounded monthly. Find the effective annual interest rate. b. Nominal rate is 8% compounded quarterly. Find the effective semi-annual rate. c. The effective annual interest rate is 19.97% and compounding is monthly. Find the nominal interest rate. d.r 5% and compounding is monthly. Find the effective quarterly interest rate. a. The effective annual interest rate is%. (Round to one decimal place.) Enter your a

Explanation / Answer

a. The effective annual interest rate = 7.2%

EAR = ((1+ APR/m)^m)-1
‘m=compounding period, APR = interest rate
=((1+7%/12)^12)-1 = 0.07229 or 7.229 interest rate

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