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Memphic Memphic
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Posts: 728
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6 years ago
The effective annual rate (EAR) for a savings account with a stated APR of 4% compounded daily (use 365 day year) is closest to:
A) 3.92%
B) 4.00%
C) 4.08%
D) 14.60%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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wrote...
6 years ago
C
Explanation:  C) EAR = (1 + APR/k)k - 1 = (1 + .04/365)365 - 1 = .04088 or 4 .08%
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