Find the APR, or stated rate, in each of the following cases:

Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) % Semiannually 11.60 % % Monthly 8.70 % Weekly 7.80 % Infinite 15.90

Find the APR, or stated rate, in each of the following cases:

Stated Rate (APR) | Number of Times Compounded | Effective Rate (EAR) | |||

% | Semiannually | 11.60 | % | ||

% | Monthly | 8.70 | |||

% | Weekly | 7.80 | |||

% | Infinite | 15.90 | |||

## Answer

1. Semiannual

EAR = [1 + (APR/m)]^{m} - 1

[(EAR + 1)^{1/m} - 1 ] * m = APR

APR = [(0.1160 + 1)^{1/2} - 1 ] * 2

APR = 11.28 %

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2.Monthly

APR = [(0.0870 + 1)^{1/12} - 1 ] * 12

APR = 8.37%

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3. Weekly

APR = [(0.0780 + 1)^{1/52} - 1 ] * 52

APR = 7.52%

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4. Infinite (use some really high number for m.

APR = APR = [(0.1590 + 1)^{1/100,000} - 1 ] * 100,000

APR = 14.76%

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