You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 9.75% APR (compounded monthly). You are considering making an extra payment of $100 today (that is, you will pay an extra $100 that you are not required to pay).

b. What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $100?