Question
A local finance company quotes an interest rate of 15.8 percent on one-year loans. So, if you borrow $35,000, the interest for the year will
A local finance company quotes an interest rate of 15.8 percent on one-year loans. So, if you borrow $35,000, the interest for the year will be $5,530. Because you must repay a total of $40,530 in one year, the finance company requires you to pay $40,530/12, or $3,377.50 per month over the next 12 months.
What rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
APR %
What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
EAR %
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