Question #42294

Write a program by A program language (Any Language) to calculate Effective Period Rate (EPR) and (ER) Effective Rate:
What is the effective annual interest rate for nominal annual interest rate of 5% compounded monthly?
Solution:
Effective Rate = (1 + 5% / 12)12 - 1
= (1 + 0.05 / 12)12 - 1
= 0.05116 = 5.116%

Expert's answer

i = (1 + r/m)

Where r = R/100 and i = I/100; r andi are interest rates in decimal form. m

is the number of compounding periods per year. The effective annual rate is the

actual interest rate for a year.

Console.WriteLine("nominalannual interest rate in % :");

doubler = Convert.ToDouble(Console.ReadLine());

Console.WriteLine("number ofcompounding periods per year:");

doublem = Convert.ToDouble(Console.ReadLine());

Console.WriteLine("EffectivePeriod Rate =" + (((Math.Pow((1+ (r / 100) / m), m) - 1))*100));

Console.WriteLine("EffectiveRate=" + ((Math.Pow((1 + (r/100)/ m), m) - 1)));

Console.ReadLine();

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