Calculate the effective annual interest rate for a $100,000 simple interest loan with 10% interest due...
Calculate the effective annual interest rate for a $100,000 simple interest loan with 10% interest due at the end of the year and 10% compensating balance.
Calculate the effective annual interest rate for a $100,000 discounted loan with 10% interest and 10% compensating balance.
Homework Answers
interest = 10% of 100000 = 10000
compensating balance = 10% of 100000 = 10000
effective annual interest rate = interest /(principal - compensating balance)
= 10000/ (100000-10000)
=10000 / 90000
=0.1111111111111111
= 11.11% approximately
Thank you so much
please comment for any help on this
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