In: Finance
Wilma borrows $10,000 from “Jaw Breaker Joe” and promises to repay Joe a total of $10,500 in one month. What is the effective annual interest rate charged by Joe?
A. 5.00%
B. 60.00%
C. 79.59%
D. 179.59%
Ans is C.79.59%
Calculations-
Note -
No. of compounding periods are 12 as there are 12 months in a year.
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