Your company are offered a bank loan with an annual percentage ate (APR) of 5 percent with quarterly compounding. What is the effective annual rate (EAR) on this loan? (Answers are rounded to two decimals) a) 5.00 % b) 21.55 % c) 5.09 % d) 1.25 % e) 105.09 %
Your company are offered a bank loan with an annual percentage ate (APR) of 5 percent with quarterly compounding. What is the effective annual rate (EAR) on this loan? (Answers are rounded to two decimals) a) 5.00 % b) 21.55 % c) 5.09 % d) 1.25 % e) 105.09 %
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 12P
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Question
Your company are offered a bank loan with an annual percentage ate (APR) of 5 percent with quarterly compounding. What is the effective annual rate (EAR) on this loan?
(Answers are rounded to two decimals)
a)
5.00 %
b)
21.55 %
c)
5.09 %
d)
1.25 %
e)
105.09 %
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