Effective rate of discounted loan

Reference no: EM1334266

Discount Loan. A discount bank loan has a quoted annual rate of 6 percent.

a) What is the effective rate of interest if the loan is for 1 year and is paid off in one payment at the end of the year?

b) What is the effective rate of interest if the loan is for 1 month?

Reference no: EM1334266

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