Gce Model Questions Vol1 2021 Commerce Question 5
Practice objective / multiple choice question 5 from the 2021 Gce Model Questions Vol1 Commerce examination.
A borrower takes a loan of \(\text{₦}1{,}000{,}000\) with a nominal annual interest rate of \(9\%\) payable annually. The bank also charges an upfront loan‑origination fee equal to \(2\%\) of the loan amount, which is deducted from the amount disbursed to the borrower. Additionally, the borrower pays discount points amounting to \(1\%\) of the loan amount, also deducted upfront. What is the effective annual interest rate (EAR) that the borrower actually pays, considering the total amount received versus the total amount to be repaid after one year? Express your answer as a percentage rounded to two decimal places.
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About This Question
This is Gce Model Questions Vol1 2021 Commerce Question 5. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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