Question

9. You were approved for your 30-year mortgage with a 4% interest rate and monthly payments. What is your effective annual rate

Answer 1

4.07%

Step-by-step explanation:

EAR = (1 + r/m)^m - 1

(1 + 0.04/12)^12 - 1

(1.00333)^12 - 1

1.04074 - 1

0.04074 = 4.07%