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When converting to a monthly ( periodic ) rate my text book does not divided EAR bythe number of compounding periods.
When converting to a monthly ( periodic ) rate my text book does not divided EAR by the number of compounding periods. It just puts one plus EAR to the power of 1/ the number of months in the applicable period. In this case, since the periodic rate was monthly, one plus EAR to the power of 1/12. The actual EAR is not being divided in parenthesis by the m. ( 1 + EAR) ^1/m I want to have this cleared up why that's the case???