Find the APR or stated rate in each of the following cases U

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 al places (e.g. 3 Number of Times Effective Rate (EAR) 14% Stated Rate (APR)Compounded % Semiannually % Monthly % Weekly % Daily 13

Solution

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

1.

0.14=(1+APR/2)^2-1

(1+0.14)=(1+APR/2)^2

(1+0.14)^(1/2)=((1+APR/2)

APR=[(1+0.14)^(1/2)-1]*2

=13.54%(Approx).

2.

0.09=(1+APR/12)^12-1

(1+0.09)=(1+APR/12)^12

(1+0.09)^(1/12)=((1+APR/12)

APR=[(1+0.09)^(1/12)-1]*12

=8.65%(Approx).

3.

0.08=(1+APR/52)^52-1

(1+0.08)=(1+APR/52)^52

(1+0.08)^(1/52)=((1+APR/52)

APR=[(1+0.08)^(1/52)-1]*52

=7.70%(Approx).

4.

0.13=(1+APR/365)^365-1

(1+0.13)=(1+APR/365)^365

(1+0.13)^(1/365)=((1+APR/365)

APR=[(1+0.13)^(1/365)-1]*365

=12.22%(Approx).