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ou have a car loan with a nominal rate of 9.54 percent. With interest charged monthly,...

ou have a car loan with a nominal rate of 9.54 percent. With interest charged monthly, what is the effective annual rate (EAR) on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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Answer #1

EAR=[(1+APR/m)^m]-1
where m=compounding periods

=[(1+0.0954/12)^12]-1

which is equal to

=9.97%(Approx).

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