Asked by Carmen LeMaster on May 31, 2024
Verified
If an interest rate of 6.9% compounded semiannually is charged on a car loan, what effective rate of interest should be disclosed to the borrower?
Effective Rate
The actual interest rate of an investment or loan when compounding interest is taken into account, differing from the nominal rate by including the effects of compounding.
- Understand and calculate effective interest rates for various compounding periods.
Verified Answer
DB
Learning Objectives
- Understand and calculate effective interest rates for various compounding periods.