Question

Calculate the Effective Annual Rate (EAR): $500 today invested in a financial tool with a rate of return of 12% that compounds 12 times a year for 8 years. 3 6 12.0000% 1.0046% 9 1.0000% 12.6825% Question 4 (1 point) Calculate the future value (FV); Yearly payments of $50 starting on year 1 in a financial tool with a rate of return of 10% that compounds 1 times a year for 5 years. $330.78 $305.26

Answer 1

Answer)

My answer is 12.6825%

Effective Annual Rate:

(1+(rate of interest/compounding times in an year))^compounding time in an year-1

=(1+(0.12/12))^12-1

=12.6825%