What is the EAR (effective annual rate) of 9.60 percent compounded quarterly?

Group of answer choices

9.68 percent

9.92 percent

9.83 percent

9.71 percent

9.95 percent

Expert Solution

We know that,

EAR = (1+ quarter rate )^4 - 1

= (1 + 0.096/4 )^4 - 1

= 9.95% Answer

The last option is correct.

jeff jeffy answered 3 years ago

Find the effective annual interest rate (EAR) for each of the following: 7.12 percent compounded quarterly....

Find the effective annual interest rate (EAR) for each of the following: 7.12 percent compounded quarterly. (Round answer to 2 decimal places, e.g. 15.25%.) 5.87 percent compounded monthly. (Round answer to 2 decimal places, e.g. 15.25%.) 7.07 percent compounded semiannually. (Round answer to 2 decimal places, e.g. 15.25%.) 6.36 percent compounded daily. (Round answer to 2 decimal places, e.g. 15.25%. Use 365 days for calculation.)

What is the effective annual rate of 9 percent compounded quarterly? a. 9.20 percent b. 9.31...

What is the effective annual rate of 9 percent compounded quarterly? a. 9.20 percent b. 9.31 percent c. 9.48 percent d. 9.65 percent

What is the EAR corresponding to a nominal rate of 8% compounded semiannually? Compounded quarterly? Compounded...

What is the EAR corresponding to a nominal rate of 8% compounded semiannually? Compounded quarterly? Compounded daily?

a) What is the EAR corresponding to a nominal rate of 8% compounded semiannually? Compounded quarterly?...

a) What is the EAR corresponding to a nominal rate of 8% compounded semiannually? Compounded quarterly? Compounded daily? b) Your client is 40 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average return of 9% in the future. If she follows your advice, how much...

) What is the EAR corresponding to a nominal rate of 8% compounded semiannually? Compounded quarterly?...

) What is the EAR corresponding to a nominal rate of 8% compounded semiannually? Compounded quarterly? Compounded daily? b) Your client is 40 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average return of 9% in the future. If she follows your advice, how much...

What is the effective annual rate (EAR) of 12% compounded monthly? (Enter your answers as a...

What is the effective annual rate (EAR) of 12% compounded monthly? (Enter your answers as a decimal rounded to 4 decimal places, not a percentage. For example, enter 0.0843 instead of 8.43%)

If you have quarterly rate (periodic rate) and want to calculate an EAR (effective annual rate),...

If you have quarterly rate (periodic rate) and want to calculate an EAR (effective annual rate), is it a simple multiplication problem? t or f

Calculate the effective annual rate for each. 6 percent compounded annually. % 6 percent compounded semiannually....

Calculate the effective annual rate for each. 6 percent compounded annually. % 6 percent compounded semiannually. % 6 percent compounded quarterly. % 6 percent compounded monthly. %

(a) For an interest rate of 6% per annum compounded quarterly, determine (i) the annual effective...

(a) For an interest rate of 6% per annum compounded quarterly, determine (i) the annual effective interest rate, (ii) the effective rate per quarter, and (iii) the effective rate per month. (b) Using the interest rates (i), (ii), and (iii) calculated in part a), calculate the future value of $1,000 deposit after 5 years. (c) Using the interest rates (i), (ii), and (iii) calculated in part a), calculate the present value of $1,000 allowance you receive 5 years from now.

What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)?...

What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)? Which rate do you believe is more relevant for financial decisions and why?

Question