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You received some advertisement material in your mail from a local bank. The bankers you a loan of $100,000 with an APR of 5%. However, the compounding frequency is not specified.
Which of the following is true?
a. The EAR is at least 5%.
b. The EAR cannot be higher than 5%.
c. The EAR can be both lower or higher than 5%.
d. The EAR must be the same as APR.
e. None of the above.

Sagot :

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