Multiple Choice
Suppose you borrow $1000 from a finance student and promise to pay them back within one year. If the interest rate on the loan is 1.25% per month, what is the effective annual interest rate (EAR) ?
A) 14.25
B) 10.25
C) 16.075
D) It cannot be determined.
Correct Answer:
Verified
Correct Answer:
Verified
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