Suppose Community Bank offers to lend you $20,000 for one year at a nominal annual rate (annual percentage rate) of 6.00%, but you must make interest payments at the end of each month and then pay off the $20,000 principal amount at the end of the year. What is the effective annual rate (EAR) on this loan?
a. 6.00%
b. 6.09%
c. 6.14%
d. 6.17%
e. 6.19%
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