Identify the Correct Expression for the Effective Annual Rate (EAR)

Multiple Choice

Identify 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