Boston College

The relationship between APR and EAR is given in Equation (3.9) in Chapter 3, repeated here as (E2.7: (E2.7) While Equation (E2.7) is not difficult to work with, Excel does have functions, NOMINAL and EFFECT, which allow us to move back and forth between an APR (called the “nominal” rate in Excel) and the EAR (called “Effect” in Excel): ................
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