Question

Find the APR, or stated rate, in each of the following cases (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.):

	Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) % Semiannually 12.2 % Monthly 13.1 Weekly 10.8 Infinite 14.5

Answer 1

APR = m[(1 + EAR)^1/m – 1]

APR = 2[(1.122)^1/2 − 1] = 0.1185 or 11.85%

APR = 12[(1.131)^1/12 − 1] = 0.1237 or 12.37%

APR = 52[(1.108)^1/52 − 1] = 0.1027 or 10.27%

APR = ln(1 + EAR) = ln(1 + 0.145) = 0.1354 or 13.54%