Mr. Miser loans money at an annual rate of 17 percent. Interestis compounded daily. What is the actu
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Mr. Miser loans money at an annual rate of 17 percent. Interestis compounded daily. What is the actu

Mr. Miser loans money at an annual rate of 17 percent. Interestis compounded daily. What is the actual rate Mr. Miser is chargingon his loans?

18.75 percent

18.53 percent

18.32 percent

18.15 percent

18.59 percent

Solution

Coxxexx option (2).Axxuax (effective) xaxe = [1 + (Axxuax rate /365)]365 - 1= [1 + (0.17 / 365)]365 - 1 = [1 +(0.000466)]365 - 1 = [1.0.000466.]365 - 1 =1.1853 - 1 = 0.1853

= 18.53%

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