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1 December, 02:06

Convert the given interest rate to the APR

7% compounded daily

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Answers (1)
  1. 1 December, 03:13
    0
    annual interest rate is 7.25 %

    Step-by-step explanation:

    Given data

    rate = 7% compounded daily

    to find out

    APR

    solution

    we have given rate 7 % compounded daily

    so we convert it annually by dividing 365

    we consider in 1 year 365 days

    rate = 7% = 0.07/365

    so annual interest rate is (1+r) ^n - 1

    put the value of rate r here

    annual interest rate = (1+r) ^n - 1

    annual interest rate = (1+0.07/365) ^ (365) - 1

    annual interest rate = (1.000191781) ^ (365) - 1

    annual interest rate = 1.072500 - 1

    annual interest rate = 0.072500

    annual interest rate is 7.25 %
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