APR and EAR calculations in Excel / Principles of finance / Episode 5

We explain the differences between the annual percentage rate (APR) and the effective annual rate (EAR) and show how to compute EAR in Excel using the "Effect" function.

00:00 The differences between APR and EAR
03:07 The EAR formula
04:03 “Effect” function in Excel
06:05 EAR with continuous compounding

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#interestrates #tutorial #finance101