What Is the Effective Annual Rate on a Loan with an APR

question 66

Multiple Choice

What is the effective annual rate on a loan with an APR of 10.6 percent if interest is compounded daily? Assume a 365-day year.

• A)10.08%
• B)11.02%
• C)10.72%
• D)10.16%
• E)11.18%

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Definitions:

Special-Interest Effect

The phenomenon where policies or regulations are influenced primarily by a small, vocal group acting in its own interest, rather than the broader public interest.

Private-Sector Provision

Goods and services provided by businesses and private individuals rather than the government, often driven by profit.

Government Provision

The supply of goods or services by the government directly or through funding public institutions.

Rational-Ignorance Effect

The decision by individuals to remain uninformed about certain matters because the perceived cost of acquiring the information exceeds the expected benefit.