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What is the effective annual rate

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Question - You plan to invest $2,000 in an individual retirement arrangement (IRA) today that pays a stated annual interest rate of 8.0%, which is expected to apply to all future years. What is the effective annual rate (EAR) if interest is compounded monthly?

a. 8.0%

b. 8.24%

c. 8.16%

d. 8.3%

Reference no: EM133059191

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