Which of the following is the correct expression for the effective annual rate (EAR) ?
A) (1 / Periodic rate of interest) number of borrowing (interest) periods in one year - 1
B) (1 + Periodic rate of interest) number of borrowing (interest) periods in one year - 1
C) (1 - Periodic rate of interest) number of borrowing (interest) periods in one year - 1
D) (1 + Periodic rate of interest) number of borrowing (interest) periods in one year + 1
E) (1 - Periodic rate of interest) number of borrowing (interest) periods in one year + 1
Correct Answer:
Verified
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