You are looking at a one-year loan of $18,500. The interest rate on a one-year l

Question

You are looking at a one-year loan of $18,500. The interest rate on a one-year loan is quoted as 11.2 percent plus three points. What is the EAR of this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

You are looking at a one-year loan of $18,500. The interest rate on a one-year loan is quoted as 11.2 percent plus three points. What is the EAR of this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

effective annual rate

=((18500*(1+11.2%))/(18500*(1-3%))-1)

=14.64%

not affected

the above are the answers

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