Final answer:
To find the effective interest rate for an 11-day loan with a periodic rate of 9.3%, we annualize the rate using the formula [(1 + i)^(365/t)] - 1, resulting in an effective annual rate of approximately 1912.0%.
Step-by-step explanation:
The subject of this question is related to the concept of effective interest rates in financial mathematics.
To approximate the effective interest rate of a loan with a given periodic interest rate, we need to annualize the rate because the loan period is less than a year (in this case, 11 days). The formula to annualize a periodic interest rate (i) for a loan period (t) in days is:
Effective Interest Rate = [(1 + i)^(365/t)] - 1
For a loan with a periodic interest rate of 9.3% (or 0.093) for 11 days, the effective annual rate is:
[(1 + 0.093)^(365/11)] - 1
Doing the calculation:
[(1.093)^(33.1818)] - 1 ≈ 1912.0%
Therefore, the approximate effective interest rate of the loan is 1912.0%, which corresponds to answer choice D.