Question

Write a program to calculate Effective Period Rate (EPR) and (ER) Effective Rate:

Formula : Effective Period Rate = Nominal Annual Rate / n

Example:

What is the effective period interest rate for nominal annual interest rate of 5% compounded monthly?

Solution:

Effective Period Rate = 5% / 12 months = 0.05 / 12 = 0.4167%

Formula : Effective Rate = (1 + Nominal Rate / n)n – 1

Answer 1

#include <iostream>#include <conio.h>using namespace std;int main() {    double nr;    int n;    cout << "Enter nominal rate: ";    cin >> nr;    cout << "Enter n: ";    cin >> n;    nr*=0.01;    cout.precision(4);    cout << "Effective Period Rate = " << fixed << nr/n*100 << "%\n";    cout << "Effective Rate = " << fixed << ((1 + nr/n)*n-1)*100 << "%\n";    return 0;}