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3 March, 01:30

What is the effective annual rate (EAR) of a mortgage that is advertised at 8.5 % (APR) over the next twenty years and paid with weekly payments? What is the effective annual rate (EAR) of the mortgage at 8.5 % APR with weekly payments? nothing % (Round to two decimal places.)

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  1. 3 March, 04:31
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    1. What is the effective annual rate (EAR) of a mortgage that is advertised at 8.5 % (APR) over the next twenty years and paid with weekly payments?

    8.87%

    2. What is the effective annual rate (EAR) of the mortgage at 8.5 % APR with weekly payments? nothing % (Round to two decimal places.)

    8.86%

    Explanation:

    1.

    APR = 8.5%

    Weekly Payment

    Number of years = 20

    m = 52 x 20 = 1040

    EAR = (1 + (0.085 / 1040) ^1040) - 1

    EAR = 0.0887

    EAR = 8.87%

    2.

    APR = 8.5%

    Weekly Payment

    Number of years = 1

    m = 52 x 1 = 52

    EAR = (1 + (0.085 / 52) ^52) - 1

    EAR = 0.0886

    EAR = 8.86%
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