A Student loan totals $30,000 at graduation. The nominal interest rate is 12% compounded monthly, and there will be 32 payments beginning 1 month after graduation. What is the monthly payment? What is owed after the first 2 years of payments? Please show work clearly, and cash flow diagram..

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.