Ask Question
BusinessBusiness
11 January, 10:18

You are considering a car loan with a stated APR of 5.42 % based on monthly compounding. What is the effective annual rate of this loan? The effective annual rate is nothing %. (Round to two decimal places.)

+1
Answers (1)
  1. 11 January, 12:57
    0
    The effective annual rate is 5.57%

    Explanation:

    The interest rate that is actually earned or paid on investment or loan including the compounding effect over a given period of time. It is also known as rate.

    Effective interest rate = [ (1 + r/m) ^m ] - 1

    Effective interest rate = [ (1 + 5.42%/12) ^12 ] - 1

    Effective interest rate = [ (1 + 0.0542/12) ^12 ] - 1

    Effective interest rate = 0.055567 x 100

    Effective interest rate = 5.5667% = 5.57%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “You are considering a car loan with a stated APR of 5.42 % based on monthly compounding. What is the effective annual rate of this loan? ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
It costs Glenwood, Inc. $82 per unit to manufacture 1,000 units per month of a product that it can sell for $122 each. Alternatively, Glenwood could process the units further into a more complex product, which would cost an additional $36 per unit.
Answers (1)
Mark responds to Brianna's concerns about the new employee end of shift policy "this is a policy straight from corporate
Answers (1)
Ohn invested $12,000 in the stock of Hyper Cyber Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double.
Answers (1)
A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results: Observation 1 2 3 4 5 Time (Seconds) 84 76 80 84
Answers (1)
A company has net income of $865,000; its weighted-average common shares outstanding are 173,000. Its dividend per share is $1.30, its market price per share is $105, and its book value per share is $101.5.
Answers (1)
New Questions in Business
The automobile industry in a developing country has very few sellers. If one automobile company raises the prices of its trucks by a certain amount, other automobile companies in the industry follow by raising prices by a similar amount.
Answers (2)
Cleo writes a check for $100 drawn on debit & credit bank and presents it to elegant jewelers for payment. if the check is not backed by sufficient funds and intent to defraud can be proved, cleo may be prosecuted for
Answers (1)
Privatization is a way to a. shrink the federal budget by selling government services or property in the private sector. b. reduce government costs by relocating government programs to private groups or corporations. c.
Answers (2)
Gonzalez Company acquired $200,000 of Walker Co., 6% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $70,000 of the bonds for 97.
Answers (1)
A debt does not have to be past due before a creditor can begin legal action against a debtor. true or false.
Answers (1)
Home » Business » You are considering a car loan with a stated APR of 5.42 % based on monthly compounding. What is the effective annual rate of this loan? The effective annual rate is nothing %. (Round to two decimal places.)
Sign Up Forgot Password?