1. You wish to take a loan of $100,000 for 7 months. You know that the bank charges an APR of 8% (compounded monthly, meaning 8%/12 per month) and a loan initiation fee of $1,100. The repayment of the loan is in a single amount at the end of the 7-month period. What is the loans EAIR? (Note: the net amount of cash you can take home is NOT $100,000 since you need to deduct the initiation fee of $1,100 from the loan amount).

Finding the loan's EAIR APR Number of month Loan period (in months) Initiation fee Loan 8.0% 12 7 1,100 100,000 Bank calculation of Principle (i.e., bank's record of your loan Your CF calculations (i.e., CFs you get & pay) Month 0 1 2 3 Monthly interest rate (use Single CF equation) Second calculation (use Rate function) EAIR Finding the loan's EAIR APR Number of month Loan period (in months) Initiation fee Loan 8.0% 12 7 1,100 100,000 Bank calculation of Principle (i.e., bank's record of your loan Your CF calculations (i.e., CFs you get & pay) Month 0 1 2 3 Monthly interest rate (use Single CF equation) Second calculation (use Rate function) EAIR