A loan that compounds interest monthly has an EAR of 14.40 percent.What is the APR?

Name: A loan that compounds interest monthly has an EAR of 14.40 percent.What is the APR?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The APR is the EAR divided by the number of compounding periods per year. In this case, the EAR is 14.40 percent and the number of compounding periods per year is 12, so the APR is 14.40 percent / 12 = 1.20 percent per month. This is equivalent to an APR of 13.59 percent per year.

A Loan That Compounds Interest Monthly Has an EAR of 14.40