Question
The effective annual rate (EAR) for a loan with a stated APR of 8% compounded monthly is closest to: A) 8.33% B) 8.00% C) 8.30%
The effective annual rate (EAR) for a loan with a stated APR of 8% compounded monthly is closest to:
A) 8.33% B) 8.00% C) 8.30% D) 8.24%
So the answer is C, 8.30% EAR = (1 + APR / m)m - 1 = (1 + 0.08/12)12 - 1 = 0.0830 or 8.30%.
However, I did the math above on my calculator and did not end up with 8.30% can someone explain please?
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Technical Analysis Of Stock Trends
Authors: Robert D. Edwards, John Magee, W.H.C. Bassetti
9th Edition
0814408648, 978-0814408643
