You plan to apply for a loan from Bank of America. The nominal annual interest rate...

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You plan to apply for a loan from Bank of America. The nominal annual interest rate...

You plan to apply for a loan from Bank of America. The nominal annual interest rate for this loan is 13.30 percent, compounded daily (with a 365-day year). What is the effective annual rate, or EAR (annual percentage yield), of this loan? Round the answer to two decimal places in percentage form.

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Answer 1

Answer #1

Nominal Interest rate (compunding daily) = 13.30%

so, effective annual interest rate = (1+R/365)³⁶⁵ - 1

so, effective annual interest rate = (1+13.30%/365)³⁶⁵ -1

=14.22%

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Answer 2

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You plan to apply for a loan from Bank of America. The nominal annual interest rate...

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