Find the single effective compound interest rate p.a. equivalent to
the following Interest rates during a period of 9 years :-
5% p.a. effective for first 5 years, 8% p.a. payable quarterly for
next four years.
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What is the Effective Annual Interest Rate?
The Effective Annual Interest Rate (EAR) is the interest rate that is adjusted for compounding over a given period. Simply put, the effective annual interest rate is the rate of interest that an investor can earn (or pay) in a year after taking into consideration compounding.
Effective Annual Interest Rate
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