If the effective annual rate of interest is known to be 16.08 percent on a debt that has quarterly payments, what is the annual percentage rate? A)4.02 percent B)10.02 percent C)14.50 percent D)15.19 percent (1.1608).²⁵ = 1 + quarterly rate 1)0380 - 1 = quarterly rate )0380 = quarterly rate

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Quizplus · Accepted Answer

The effective annual rate (EAR) is calculated using the formula: EAR = (1 + APR/n)^n - 1, where n is the number of compounding periods per year. Solving for APR when EAR is 16.08% and n is 4 (quarterly), we find APR to be approximately 15.19%.

If the Effective Annual Rate of Interest Is Known to Be