A local finance company quotes an interest rate of 17.2% on one-year loans. So, if you borrow $25,000, the interest for the year will| be $4,300. Because you must repay a total of $29,300 in one year, the finance company requires you to pay $29,300/12, or $2,441.67 per month over the next 12 months. What is the effective annual rate?

A local finance company quotes an interest rate of 17.2% on one-year loans. So, if you borrow $25,000, the interest for the year will| be $4,300. Because you must repay a total of $29,300 in one year, the finance company requires you to pay $29,300/12, or $2,441.67 per month over the next 12 months. What is the effective annual rate?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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