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You are considering a car loan with a stated APR of 6.69% based on monthly compounding. What is the effective annual rate of
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Answer:

i= 6.69%

n= 12

Effective annual rate = {(1+ i/n)^n} - 1

= {(1+ 0.0669/12)^12} - 1

= ({1.00575)^12}- 1

=1.071224-1= 0.071224

Effective annual rate is 7.12%

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