One bank offers you 5% interest compounded monthly. What would the equivalent rate be if interest...

Question

Question

One bank offers you 5% interest compounded monthly. What would the equivalent rate be if interest were compounded quarterly?

business finance

Answer 1

Answer #1

EAR = (1+APR÷n)^n-1
n is number of compounding per year

	Monthly compounded EAR	5.12%	=(1+5%/12)^12-1

Answer 2

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