Your company are offered a bank loan with an annual percentage ate (APR) of 5 percent with quarterly compounding. What is the effective annual rate (EAR) on this loan? (Answers are rounded to two decimals) a) 5.00 % b) 21.55 % c) 5.09 % d) 1.25 % e) 105.09 %

Your company are offered a bank loan with an annual percentage ate (APR) of 5 percent with quarterly compounding. What is the effective annual rate (EAR) on this loan? (Answers are rounded to two decimals) a) 5.00 % b) 21.55 % c) 5.09 % d) 1.25 % e) 105.09 %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 12P

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Question

Your company are offered a bank loan with an annual percentage ate (APR) of 5 percent with quarterly compounding. What is the effective annual rate (EAR) on this loan?

(Answers are rounded to two decimals)

5.00 %

21.55 %

5.09 %

1.25 %

105.09 %

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