Kurt loans Randy $14000. Randy repays the loan by paying Kurt $4000 at the end of one year and $6000 at the end of two years and as well as at the end of three years. The money received at t = 1 and at t = 2 is immediately reinvested at an annual effective interest rate of 3%. Correct to the nearest tenth of a percent, find Randy's annual effective interest rate and Kurt's annual yield......PLease show how to dfind answer along with answer.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.