What is the effective annual rate on loan

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Reference no: EM13875944

Suppose National Bank offers to lend you $10,000 for one year at a nominal annual rate (annual percentage rate) of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. What is the effective annual rate (EAR) on this loan?

8.00%

8.24%

8.30%

8.33%

Reference no: EM13875944

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