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The question asks to calculate the *effective annual rate* (EAR) given the following:

- Annual Percentage Rate (APR) of 9% or 0.09
- Compounding frequency of 3 times per year.

To calculate the *effective annual rate*, we use the formula:

\[
r_a = \left(1 + \frac{r_{nom}}{n}\right)^n - 1
\]

Where:
- \(r_a\) is the effective annual rate.
- \(r_{nom}\) is the nominal annual interest rate (the APR), which is 0.09.
- \(n\) is the number of compounding periods per year, which is 3.

Let's calculate it!The effective annual rate (EAR) is approximately **0.0927** or 9.27%, rounded to four decimal places.

Do you want further details on the calculation, or have any other questions?

Here are five related questions:
1. How does the effective annual rate differ from the nominal interest rate?
2. What would the EAR be if the compounding frequency was different (e.g., 12 times per year)?
3. How would the calculation change for continuous compounding?
4. Why is the effective rate important for understanding loan or investment costs?
5. What would the result be if the APR was 5% instead?

**Tip:** The more frequent the compounding, the higher the effective annual rate, even with the same nominal rate.

Given a principal P and an APR of 9%, compounding 3 times per year, compute the effective annual rate r_a. Enter your answer as a decimal, and round to four decimal places.

Learn how to calculate the effective annual rate (EAR) when given an APR of 9% and 3 compounding periods per year. This example explains key concepts in compound interest and interest rates with a step-by-step solution. Suitable for high school students in Grades 10-12.

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