You're offered a 5.200% rate (APR) on your mortgage loan. With monthly payments, what is the...

You're offered a 5.200% rate (APR) on your mortgage loan. With monthly payments, what is the Effective Annual Rate on the loan? 5.326% 5.314% 5.146% 5.402%

Expert Solution

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

=[(1+0.052/12)^12]-1

which is equal to

=5.326%(Approx)

jeff jeffy answered 2 years ago

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