Find the EAR in each of the following cases (Use 365 days a year. Do not round intermediate calculations and round your final answers to 2 decimal places. (e. g., 32.16)) : Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) 9.4 % Quarterly % 18.4 Monthly 14.4 Daily 11.4 Infinite

Quarterly EAR = 9.73 % Monthly EAR = 20.03 % Daily EAR = 15.46 % Infinite EAR = 12.07%

Step-by-step explanation:

EAR = (1 + APR/T) ∧T-1

1. With 9.4 % quarterly compounding

EAR = (1 + 0.094/4) ∧4 - 1 = 1.0235∧4 - 1 = 1.0973 - 1 = 0.0973

Quarterly EAR = 9.73 %

2. With 18.4% monthly compounding

EAR = (1 + 0.184/12) ∧12 - 1 = 1.01533^12 - 1 = 1.2003 - 1 = 0.2003

Monthly EAR = 20.03 %

3. With 14.4% daily compounding

14.4/365 = 0.0394%

EAR = (1 + 0.144/365) ∧365 - 1 = 1.000394^365 - 1 = 1.1546 - 1 = 0.1546‬

Daily EAR = 15.46 %

4. With 11.4% infinite compounding

EAR = (1 + 0.114/10000) ∧10000 - 1 = 1.0000114‬∧10000 - 1 = 1.12075 - 1

= 0.1207

Infinite EAR = 12.07%