A business receives $235,648.98 today from its bank and signs a one-year note that has a maturity value of $250,000.00. Determine the effective annual interest rate on this loan, and determine the nominal annual rate assuming semiannual compounding. You may find the following form helpful.
|
Half-Year |
Half-Year Start of Period |
Interest at ?% |
Loan Balance at End of Period |
|
First |
$235,648.98 |
|
|
|
Second |
|
|
$250,000.00 |