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Effective annual rate (EAR) is the interest rate that would earn the same interest with annual compounding A bank offers a loan that will requires

Effective annual rate (EAR) is the interest rate that would earn the same interest with annual compounding A bank offers a loan that will requires you to pay 7% interest compounded monthly. Which of the following is closest to the EAR charged by the bank?

A) 5.78%

B) 4.68%

C) 6.46%

D) 7.23%

E). 3.27%

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