Which of the following is the correct expression for the effective annual rate (EAR)??
A. ?(1 / Periodic rate of interest)number of borrowing (interest) periods in one year- 1
B. ?(1 + Periodic rate of interest)number of borrowing (interest) periods in one year- 1
C. ?(1 - Periodic rate of interest)number of borrowing (interest) periods in one year- 1
D. ?(1 + Periodic rate of interest)number of borrowing (interest) periods in one year + 1
E. ?(1 - Periodic rate of interest)number of borrowing (interest) periods in one year + 1
Answer: B
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