What is the annual percentage rate on a loan with a stated rate of 2.109 percent per quarter?
To find the Annual Percentage Rate (APR) on a loan with a stated rate of 2.109 percent per quarter, you need to convert the quarterly rate to an annual rate.
First, calculate the annual rate by multiplying the quarterly rate by 4 (since there are 4 quarters in a year):
2.109 percent per quarter * 4 quarters = 8.436 percent per year
Therefore, the annual percentage rate on the loan is 8.436 percent.
To calculate the annual percentage rate (APR) based on a stated rate per quarter, you can follow these steps:
Step 1: Convert the quarterly interest rate to an annual rate.
To convert the quarterly rate to an annual rate, multiply it by the number of quarters in a year. In this case, there are 4 quarters in a year.
Annual interest rate = Quarterly interest rate * Number of quarters
Annual interest rate = 2.109% * 4 = 8.436%
Step 2: Round the result to the nearest hundredth if needed.
In this case, the annual interest rate is already given to the nearest thousandth (2.109%). Therefore, there is no need to round the result.
Therefore, the annual percentage rate (APR) on the loan with a stated rate of 2.109 percent per quarter is 8.436%.