Problem:
The bank uses discount loans all of its customers who want one-year loans. Currently, the bank is providing one-year discount loans at 8.5%.
Required:
Question 1: What is the effective annual rate of these loans?
Question 2: If you were required to repay $220,000 at the end of the loan for one year, how much would the bank give you on your loan at the start of your loan?
Note: Please show guided help with steps and answer.