What is the EAR if the APR is 10.52% and compounding is daily?
A)Slightly above 10.09%
B)Slightly below 11.09%
C)Slightly above 11.09%
D)Over 11.25%

Question

Quizplus · Accepted Answer

To calculate EAR (Effective Annual Rate) when compounding is daily, we will use the formula:
EAR = (1+APR/365)^365 - 1
Substituting the given values, we get:
EAR = (1+ 0.1052/365)^365 -1
EAR = 0.110956 or 11.0956%
Hence, the answer is option C, which is slightly above 11.09%.

What Is the EAR If the APR Is 10