Which interest rate is better for a borrower? An annual rate of 10% compounded quarterly or an annual rate of 10.1% compounded semi-annually?
Added by Stephen P.
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The formula for effective annual interest rate is \( (1 + \frac{r}{n})^n - 1 \), where r is the nominal annual interest rate and n is the number of compounding periods per year. In this case, r = 10% and n = 4. Show more…
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