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Compounding Periods For example, if you invest $50 for 3 years at compounded semi-annually, your investment will grow to notes Effective Annual Rates of Interest

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Compounding Periods For example, if you invest $50 for 3 years at compounded semi-annually, your investment will grow to notes Effective Annual Rates of Interest A reasonable question to ask in the above example is"what is the effective annual rate of interest on that investment?" 25 The Effective Annual Rate (EAR) of interest is the annual rate that would give us the same end-of-investment wealth after 3 years

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