What is the effective annual return (EAR) for an investment that pays 10 percent compounded annually?
A)equal to 10 percent
B)greater than 10 percent
C)less than 10 percent
D)This question cannot be answered without knowing the dollar amount of the investment.
E)None of the above is correct.

Question

Quizplus · Accepted Answer

The effective annual return (EAR) is equal to the nominal rate when interest is compounded annually, so it is 10 percent.

What Is the Effective Annual Return (EAR) for an Investment