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Homework answers / question archive / a loan is offered with monthly payments and a 9
a loan is offered with monthly payments and a 9.00 percent APR. Whats's the loan's effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Computation of the effective annual rate (EAR):-
EAR = (1+APR/n)^n-1
Here, n = 12 periods (monthly)
EAR = (1+9%/12)^12-1
= 1.0938 - 1
= 9.38%
