A company borrows $250,000 from its bank for one year. At the maturity date, one year after the money’s deposited in the company’s checking account, it writes a check to the bank for $268,324 to pay off the loan. Determine the effective annual interest rate and the nominal annual interest rate assuming semiannual compounding.
|
Half-Year |
Half-Year Start of Period |
Interest at ?% |
Loan Balance at End of Period |
|
First |
$250,000.00 |
|
|
|
Second |
|
|
$268,324.00 |