Question: The Rasputin Brewery is considering using a public warehouse loan as part of its short-term financing. The firm will require a loan of $560,000. Interest

The Rasputin Brewery is considering using a public warehouse loan as part of its short-term financing. The firm will require a loan of $560,000. Interest on the loan will be 10.1% (APR, annual compounding) to be paid at the end of the year. The warehouse charges 1.01% of the face value of the loan, payable at the beginning of the year. What is the effective annual rate (EAR) of this warehousing arrangement?

Part 1

The effective annual rate is %.

(Round to two decimal places.)

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