Mr. Miser loans money at an annual rate of 22 percent. Interest is compounded da

Question

Mr. Miser loans money at an annual rate of 22 percent. Interest is compounded daily. What is the actual rate Mr. Miser is charging on his loans?
-24.29 percent -24.60 percent -24.92 percent -24.22 percent -24.66 percent
Mr. Miser loans money at an annual rate of 22 percent. Interest is compounded daily. What is the actual rate Mr. Miser is charging on his loans?
-24.29 percent -24.60 percent -24.92 percent -24.22 percent -24.66 percent

-24.29 percent -24.60 percent -24.92 percent -24.22 percent -24.66 percent

Explanation / Answer

lET THE AMOUNT BE 100000

daily interest

1000000*.22/365

= 600.27

Effective Rate = (1 + r/n)^n - 1

= (1+.22/365)365-1

= 24.60%

The effective rate is 24.60%

The correct answer is b. 24.60%

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