Ask Me Help Desk

Ask Me Help Desk (https://www.askmehelpdesk.com/forum.php)
-   Finance (https://www.askmehelpdesk.com/forumdisplay.php?f=125)
-   -   Ear to apr (https://www.askmehelpdesk.com/showthread.php?t=135878)

  • Oct 1, 2007, 11:56 AM
    sfung0909
    Ear to apr
    If the Effective Annual Rate is 8.10% semi-annually, what is the Annual Percentage Rate?
  • Oct 1, 2007, 08:48 PM
    ake_finance
    Effective annual rate = (1+I)^n - 1
    = (1.081)^2 -1
    =0.168561 or 16.86%
  • Oct 1, 2007, 09:01 PM
    ake_finance
    **** Sory****
    the above calculations is quite wrong because I just see the word annual from "Effective Annual Rate is 8.10%"
    So, I will correct the calculation now.
    However, you informations are quite not clear due to your question that"what is the Annual Percentage Rate?". Now I suppose that you want to find nominal annual rate because you already have effective annual rate.

    Effective annual rate = (1+I)^n - 1
    0.081= (1+I)^2 -1
    1.081=(1+I)^2
    take square root both sides
    1.0397 = 1+I
    0.0397 or 3.97% = I (se-mi annual)
    To translate the se-mi annual into annual, 3.97% is multiplied by 2
    So, the answer is 7.94%

  • All times are GMT -7. The time now is 06:44 PM.