What is the effective annual rate (EAR) for each of the following one-year, $1,000 bank loans?
a) A loan with an APR of 5.8%, compounded monthly
The EAR in this case is.... %. (Round to one decimal place.)
b) A loan with an APR of 5.8%, compounded annually, that also has a compensating balance requirement of 9.5% (on which no interest is paid)
The EAR in this case is.... %. (Round to one decimal place.)
c) A loan with an APR of ......, compounded annually, that has a 1.05% loan origination fee
The EAR in this case is....... %. (Round to one decimal place.)
This question has been answered before but wrong answer. I need a very good finance person to look into it.