Question

Find the APR, or stated rate, in each of the following cases (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.):

Answer 1

Note: The complete question is attached as picture below

EAR=(1+APR/m)^m-1 . M = compounding periods

1. EAR=(1+APR/m)^m-1

0.119 = (1+APR/2)^2-1

(1+0.119) = (1+APR/2)^2

(1.119)^(1/2)=1+APR/2

APR = [(1.119)^(1/2)-1]*2

APR = 0.11565592665

APR = 11.57%

2. EAR = (1+APR/m)^m-1

0.128 = (1+APR/12)^12-1

APR = [(1+0.128)^(1/12)-1]*12

APR = 0.12105265037

APR = 12.11%

3. EAR = (1+APR/m)^m-1

0.105 = (1+APR/52)^52-1

APR = [(1+0.105)^(1/52)-1]*52

APR = 0.09994125299

APR =9.99%

4. EAR = (1+APR/m)^m-1

EAR = (e)^APR-1 where e = 2.71828

0.142 = (2.71828)^APR-1

(1+0.142) = (2.71828)^APR

Taking log on both sides;

log 1.142 = APR*log 2.71828

Hence APR = log 1.142 / log 2.71828

APR = 0.13278120054

APR = 13.28%