Which of the Following Mathematical Equations Is Used to Compute

question 22

Multiple Choice

Which of the following mathematical equations is used to compute the effective annual rate (EAR) ?

• A)EAR = (1/Periodic rate of interest)^{number of borrowing (interest) periods in one year} - 1
• B)EAR = (1 + Periodic rate of interest)^{number of borrowing (interest) periods in one year} - 1
• C)EAR = (1 - Periodic rate of interest)^{number of borrowing (interest) periods in one year} - 1
• D)EAR = (1 + Periodic rate of interest)^{number of borrowing (interest) periods in one year} + 1
• E)EAR = (1 - Periodic rate of interest)^{number of borrowing (interest) periods in one year} + 1

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Definitions:

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A part of the brain located at the back and beneath the cerebrum, responsible for coordinating voluntary movements and maintaining balance and posture.

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