Intro

You want to take out a loan for $400,000 for 3 months. All loan options have an APR of 10%, and interest is only paid at the end of the loan.

Attempt 1/10 for 8.5 pts.

Part 1

One option is a simple loan with an APR of 10%. What is the effective annual rate of the loan?

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Attempt 1/10 for 8.5 pts.

Part 2

Another option is to take out a loan with an origination fee of 3%. What is the effective annual rate of the loan?

Submit

Attempt 1/10 for 8.5 pts.

Part 3

Another option is to take out a loan with a compensating balance requirement of 3% that reduces the usable loan amount. What is the effective annual rate of the loan?

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