Find the APR the stated interest rate for each case Do not r

Find the APR (the stated interest rate) for each case. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)  

Effective Annual Interest Rate Compounding Period APR

13.35 % 1 month _______%

6.61% 6 months ______%

9.31% 3 months _______%

Solution

Effective Annual Interest Rate = 13.35%

So, APR = {(1+ Interest Rate/ 12*no. of months) ^ no. of months compounded in a year -1}*100

Or, APR = {(1+ 13.35%/12*1) ^ 12 -1}*100 = 14.20%

Effective Annual Interest Rate = 6.61%

So, APR = {(1+ Interest Rate/ 12*no. of months) ^ no. of months compounded in a year -1}*100

Or, APR = {(1+ 6.61%/12*6) ^ 2 -1}*100 = 6.72%

Effective Annual Interest Rate = 9.31%

So, APR = {(1+ Interest Rate/ 12*no. of months) ^ no. of months compounded in a year -1}*100

Or, APR = {(1+ 9.31%/12*3) ^ 4 -1}*100 = 9.65%