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Bank A charges 16% APR on auto loans with monthly compounding. What is the Effective Annual Interest Rate (EAR)? A) 16%, since EAR = APR

Bank A charges 16% APR on auto loans with monthly compounding. What is the Effective Annual Interest Rate (EAR)?

A) 16%, since EAR = APR for monthly compounding

B) 13.3%

C) 1.33%

D) 17.23%

E) 18.12%

F) none of the other responses are reasonably close answers to the correct EAR

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