What is the effective annual rate (EAR) for each of the following one-year, $1,000 bank loans?
a.) A loan with an APR of 5.8%, compounded monthly
The EAR in this case is.... %. (Round to one decimal place.)
b.) A loan with an APR of 5.8%, compounded annually, that also has a compensating balance requirement of 9.5% (on which no interest is paid)
The EAR in this case is.... %. (Round to one decimal place.)
c.) A loan with an APR of ......, compounded annually, that has a 1.05% loan origination fee
The EAR in this case is....... %. (Round to one decimal place.)
This question has been answered before but wrong answer. I need a very good finance person to look into it.
What is the effective annual rate (EAR) for each of the following one-year, $1,000 bank loans?
a.) A loan with an APR of 5.8%, compounded monthly
The EAR in this case is.... %. (Round to one decimal place.)
b.) A loan with an APR of 5.8%, compounded annually, that also has a compensating balance requirement of 9.5% (on which no interest is paid)
The EAR in this case is.... %. (Round to one decimal place.)
c.) A loan with an APR of ......, compounded annually, that has a 1.05% loan origination fee
The EAR in this case is....... %. (Round to one decimal place.)
This question has been answered before but wrong answer. I need a very good finance person to look into it.
Related questions
You want to buy a new sports coupe for $75,500, and the finance office at the dealership has quoted you a loan with an APR of 7.9 percent for 72 months to buy the car.
| Requirement 1: |
| What will your monthly payments be? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Monthly payment | $ |
| Requirement 2: |
| What is the effective annual rate on this loan? |
