Review: (1) Annual Percentage Rate (APR) APR=Per-Period Rate *Periods per Year (2) Effective Annual Rate (EAR) 1 + EAR = (1 + Per - period Rate)" (3) The relation between EAR & APR APR EAR = (1+)" - 1 APR = [(1 + EAR)1/1 1] * n Where: n ---- Periods per Year Question 2: Suppose you invest $200 in Fund A for 1 year, which offers you semiannual rate at 10%. (1) What will be the EAR for your investment? (2) If there is another Fund, Fund B, which offers monthly rate at 2%. All other conditions being equal, if you can choose to invest in either Fund A or Fund B. Which one could be a better choice? Why