Question
Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 9.00%, but you must make interest payments at
Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 9.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. What is the effective annual rate on the loan?
11.45% | ||
7.26% | ||
9.40% | ||
9.31% | ||
10.70% |
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Engineering Economic Analysis
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
9th Edition
978-0195168075, 9780195168075
