Question
In: Finance
A bank offers 9.00% on savings accounts. What is the effective annual rate if interest is...
A bank offers 9.00% on savings accounts. What is the effective annual rate if interest is compounded monthly?
Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))
Solutions
Expert Solution
EAR=[(1+APR/m)^m]-1
where m=compounding periods
=[(1+0.09/12)^12]-1
which is equal to
=9.3807%(Approx)
jeff jeffy answered 2 years agoRelated Solutions
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