Question
Suppose Community Bank offers to lend you $20,000 for one year at a nominal annual rate (annual percentage rate) of 6.00%, but you must make
Suppose Community Bank offers to lend you $20,000 for one year at a nominal annual rate (annual percentage rate) of 6.00%, but you must make interest payments at the end of each month and then pay off the $20,000 principal amount at the end of the year. What is the effective annual rate (EAR) on this loan?
| 6.00% | ||
| 6.09% | ||
| 6.14% | ||
| 6.17% | ||
| 6.19% |
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Derivatives And Internal Models
Authors: Hans Peter Deutsch, Mark W. Beinker
5th Edition
3030229017, 9783030229016
