question archive Arabian Beauty Cosmetics borrowed BD 152,300 from the National Bank of Bahrain (NBB) for three years
Arabian Beauty Cosmetics borrowed BD 152,300 from the National Bank of Bahrain (NBB) for three years
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Arabian Beauty Cosmetics borrowed BD 152,300 from the National Bank of Bahrain (NBB) for three years. If the quoted rate (APR) is 11.75%, and the compounding is daily, what is the Effective Annual Rate?
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Effective annual rate= (1+APR/m)^m-1
= (1+11.75%/365)^365-1
= 1.000321918^365 -1
= 1.124660364-1
= 0.124660364
=12.47%
