You are looking at a one-year loan of $11,500. The interest rate on a one-year loan is quoted as 12.4 percent plus two points. What is the EAR of this loan? (Hint: A "point" is a 1% up-front fee charged by a lender. It can be viewed as pre-paid interest or simply a deduction of the amount you receive on the original loan. You still owe the full principal at due date of loan.)

Effective Annual Rate = ____

Affected or Not Affected?