Question

First National Bank charges 11.5 percent compounded monthly on its business loans. First United Bank charges 11.7 percent compounded semiannually.

Calculate the EAR for each bank. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

First National Bank%___?

First United Bank%____?

Answer 1

The formula to calculate EAR is given below:

EAR for first national bank is:

+

EAR is 12.13%.

EAR for first united bank is:

EAR is 12.04%.