In: Finance
You agree to loan your sister $22,000. She will repay you in monthly installments of $450 for 5 years. What is the EAR on the loan? Round your answers to two decimal places
monthly rate will be
=RATE(nper,pmt,pv,fv)
=RATE(5*12,450,-22000,0)
=0.6976%
What is the EAR on the loan=(1+0.6976%)^12-1=8.70%