Identify the correct expression for the effective annual rate (EAR).

Select one:

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

Sarah invests $2700 today in an account that pays 6 percent interest compounded annually. She wants to know the total balance in her account five years from today. Identify the correct keystrokes to be used in a financial calculator to determine the total balance.

Select one:

a. N = 6, I/Y = 5, PV = 2,700

b. N = 5, I/Y = 6, PV = 2,700

c. N = 5, I/Y = 6, PV = -2,700

d. N = 5, I/Y = 6%, PV = -2,700

e. N = 5, I/Y = 6%, PV = 2,700