All in annual rate of 5.25% for one month loan of $2mm -
I thought it would be ((1+(5.25/12))(^12) - 1 = 5.38% for the formula of EAR, but that is incorrect.
Says it should be (2mm * 5.25% * 1/12)) / 2mm * (1-5.25% * 1/12) = 5.27%
Can someone explain why this might be the case?