Answer:
7.57%
Explanation:
The formula for effective annual rate is provided below which forms the basis for determining the effective annual rate:
effective annual rate=(1+APR/m)^m-1
APR=annual percentage rate=7.32%
m=number of times in a year that is the interest is compounded=12
effective annual rate=(1+7.32%/12)^12-1
effective annual rate=(1+0.0061 )^12-1
effective annual rate=1.075706488 -1
effective annual rate=7.57%
