Final answer:
The student's question revolves around calculating the effective annual rate (EAR) for a car loan. Actual values for the sticker price, monthly payment, and loan term are necessary, which are missing in the question to complete the calculation.
Step-by-step explanation:
The question seems to be about calculating the effective annual rate (EAR) on a loan used to purchase a car. However, specific values in the question are missing, such as the sticker price of the car, the monthly payment amount, and the term of the loan (number of months). To calculate the EAR, these values would be needed to determine the actual rate of interest being paid over the course of a year, taking into account the effects of compounding.
An example calculation for the EAR can be done if we had a car with a sticker price of $20,000, a loan term of 60 months, and a monthly payment of $350. However, without the actual values, we can only explain the process. To calculate the EAR, you would first determine the monthly interest rate that satisfies the equation of the present value of an annuity. Afterwards, you would use this monthly rate to find the EAR by compounding it over the 12 months of the year.