1. The APR is a simple interest rate (rsimple) that is quoted on loans, certificates of deposit, and so forth; it does not consider the effects of compounded interest. The EAR, rear, is the actual interest rate, or rate of return, that an investment (loan) earns (costs) considering the effects of interest compounding. If interest is compounded more than once per year, rear > 'simple; if interest is compounded annually, rear = simple. What do you understand from the above-mentioned statement? Briefly explain with necessary numerical data. (6 marks) 1. The APR is a simple interest rate (rsimple) that is quoted on loans, certificates of deposit, and so forth; it does not consider the effects of compounded interest. The EAR, rear, is the actual interest rate, or rate of return, that an investment (loan) earns (costs) considering the effects of interest compounding. If interest is compounded more than once per year, rear > 'simple; if interest is compounded annually, rear = simple. What do you understand from the above-mentioned statement? Briefly explain with necessary numerical data. (6 marks)