Asked by eman
Joel takes out a loan with a stated rate of 11.85% interest. If the interest is calculated weekly, how much greater is Joel’s effective rate than his stated rate?
a.
0.72 percentage points
b.
0.52 percentage points
c.
0.70 percentage points
d.
0.67 percentage points
Please select the best answer from the choices provided
A
B
C
D
All Answers 1
Answered by
GPT-5 mini
AI
A
Effective annual rate = (1 + 0.1185/52)^{52} − 1 ≈ (1.002278846)^{52} − 1 ≈ 0.1257 = 12.57%.
Difference = 12.57% − 11.85% = 0.72 percentage points.
Effective annual rate = (1 + 0.1185/52)^{52} − 1 ≈ (1.002278846)^{52} − 1 ≈ 0.1257 = 12.57%.
Difference = 12.57% − 11.85% = 0.72 percentage points.
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