You have agreed to a $50,000 fixed-rate loan from First National Bank today and promise to repay the loan with 36 equal monthly payments at an APR of 6.50%. What is the EAR of this loan?
A) 6.50%
B) 6.70%
C) 6.90%
D) 7.10%
Answer: B
Explanation: B) EAR = - 1 = - 1 = 6.70%.
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