Everything Else Remaining Same, Under What Situation Will APR and EAR

question 109

Essay

Everything else remaining same, under what situation will APR and EAR be equal?

---

Definitions:

Compounded Annually

Refers to the process of calculating interest on an investment or loan once per year, adding it to the principal amount.

Perpetuity

An annuity that pays a fixed amount of money indefinitely.

Monthly Benefits

Regular payments received by an individual, typically from a pension or retirement fund, on a monthly basis.

Compounded Monthly

Interest calculation method where interest accrued is added to the principal sum each month, leading to an increase in the subsequent month's interest calculation.