11. Calculate the effective annual rate on each of the following loans:

a. A $5,000 loan for two years, 10 percent simple annual interest, with principal repayment at the end of the second year

5000(.10)(2) = $1,000

(1,000/2) = 500

500/5000 = 10%

b. A $5,000 loan for two years, 10 percent add-on interest, paid in 24 equal monthly installments

c. A $5,000 loan to be repaid at the end of two years, 10 percent discount rate