Please choose the correct ending to complete the given sentence: Finance and Business: [header] How to calculate effective interest rate [title] Familiarize yourself with the concept of the effective interest rate. [step] The effective interest rate attempts to describe the full cost of borrowing. It takes into account the effect of compounding interest, which is left out of the nominal or " stated " interest rate.

Ending1: [substeps] Regulations are in place to determine the effective interest rate when borrowing property. Interest rates vary based on the amount of property that you can borrow, and additional investments or savings for the loan with property value are required. Ending2: [substeps] The intent behind calculating the effective interest rate is much simpler. The appropriate rate of interest is calculated by first defining the interest rate to be used. Ending3: The period of interest between exemptions (years) or a lump sum basis (usually 15 years) is equal to 6 years. An example of a dependent deduct for an exemption is 120 years and the sum of the depreciable earnings is 10 years. Ending4: [substeps] For example, a loan with 10 percent interest compounded monthly will actually carry an interest rate higher than 10 percent, because more interest is accumulated each month. The effective interest rate calculation does not take into account one-time fees like loan origination fees.

Answer format: ending1/ending2/ending3/ending4