Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest
0.01%.
-4.3% compounded daily (assume 365 days per year)

Question

Quizplus · Accepted Answer

The effective annual interest rate (EAR) can be calculated using the formula EAR = (1 + r/n)^(n*t) - 1, where r is the nominal annual interest rate (expressed as a decimal), n is the number of compounding periods per year, and t is the time in years. For a 4.3% nominal rate compounded daily, EAR = (1 + 0.043/365)^(365*1) - 1 ≈ 0.0439 or 4.39%.

Find the Effective Annual Interest Rate for the Given Nominal