A bank pays interest quarterly with an EAR of 13%. What is the periodic interest rate...

Question

Question

business finance

Answer 1

Answer #1

Say, the periodic quarterly interest rate applicable is r

Hence, EAR=(1+r)^4-1=13%

or, (1+r)^4=1.13

or, 1+r=1.031

or, r= 3.10%

Option c is correct.

Answer 2

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