The highest effective annual rate that can be derived from an annual percentage rate of 9 percent is computed as

Question

Quizplus · Accepted Answer

The highest effective annual rate is calculated using the formula: 
Effective Annual Rate = (1 + Annual Percentage Rate / Number of compounding periods) ^ Number of compounding periods - 1

Substituting the values, 
Effective Annual Rate = (1 + 0.09 / 1) ^ 1 - 1 
= 0.09

Therefore, the highest effective annual rate that can be derived from an APR of 9 percent is 9 percent, which is option C.

The Highest Effective Annual Rate That Can Be Derived from an Annual