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barcain credit corp. wants to earn an effective annual return on its consumer loans of 12 percent per year. the bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers

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abiolataiwo2015

Answer:

11.17%

Explanation:

Calculation to determine What interest rate is the bank required by law to report to potential borrowers

Required Effective Annual Rate = 12%

APR(Daily) = 365[(1.12)^1/365 - 1]

APR(Daily) = 365[(1.12)^0.0027-1]

APR(Daily) = 11.17%

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