Respuesta :
Answer:
14.84%
Explanation:
Effective annual return (EAR) = (1 + ( r / m) ^m -1
APR = m (( 1 + EAR) ^( 1/m) - 1)
where m = 365 since it is compounded daily
APR = 365 (( 1 + 0.16) ^( 1/365) - 1) = 14.84%
Answer:
14.84%
Explanation:
The formula to calculate the effective annual return ((EAR) is
Effective annual return (EAR) = {1 + ( r / m) ^m -1}
m = 365 compounded daily for a year
EAR = 0.16
Calculation of APR is as follows
APR = m {( 1 + EAR) ^( 1/m) - 1} ×100
APR = 365 {( 1 + 0.16) ^( 1/365) - 1} ×
APR = 365{(1.16)^(0.00273972603)-1}×100%
APR = 365{1.00040671284 - 1} ×100%
APR = 365× (0.00040671284)×100%
APR = 0.1484× 100%
APR = 14.84%
