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Calculating APR Vandermark Credit Corp. wants to earn an effective annual return on its consumer loans of 1 3 . 9 percent per year. The

Calculating APR Vandermark Credit Corp. wants to earn an effective

annual return on its consumer loans of

13.9

percent per year. The bank uses

daily compounding on its loans. What interest rate is the bank required by

law to report to potential borrowers? Explain why this rate is misleading to

an uninformed borrower.

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