Question 21 Galoraz Bhd has a line of credit of RM325,000 with an interest rate of 1.85 percent per quarter. Their short-term investments earning is 0.48 percent per quarter. What is the effective annual interest rate (EAR) on this arrangement if the line of credit goes unused all year? Assume any funds borrowed or invested use compound interest.   Select one: A. 7.61% B. 2.14% C. 1.93% D. 10.38%

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A:

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Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.