# Answer on Finance Question for sha26ron@hotmail.com

Question #74

What is the effective monthly rate over 7.3 years on a loan whose compound monthly rate is 5.475%?

Expert's answer

You have to calculate your compound interest rate for 7.3 years. Then you have to divide it on number of months (7.3*12). So correct answer is:

[(1+0,05475)^(7.3*12)]/(7.3*12) = 0,217 (or 21,7%)

[(1+0,05475)^(7.3*12)]/(7.3*12) = 0,217 (or 21,7%)

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