wwwWillYou borrow $1,000 from the bank and agree to repay the loan over the next year in 12 equal monthly payments of $90. However, thbank also charges you a loan initiation fee of $25, which is taken out of the initial proceeds of the loan. What is the effective annuallinterest rate on the loan, taking account of the impact of the initiation fee? (Do not round intermediate calculations. Enter youranswer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.)Effective annual interest rate19.98 %< Prev

The effective annual interest rate is a crucial concept in finance that is used to describe the true…

bank also charges you a loan initiation fee of $25, which is taken out of the initial proceeds of the loan. What is the effective annual interest rate on the loan, taking account of the impact of the initiation fee? (Do not round intermediate calculations. Enter your

bank also charges you a loan initiation fee of $25, which is taken out of the initial proceeds of the loan. What is the effective annual interest rate on the loan, taking account of the impact of the initiation fee? (Do not round intermediate calculations. Enter your

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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www
Will
You borrow $1,000 from the bank and agree to repay the loan over the next year in 12 equal monthly payments of $90. However, th
bank also charges you a loan initiation fee of $25, which is taken out of the initial proceeds of the loan. What is the effective annuall
interest rate on the loan, taking account of the impact of the initiation fee? (Do not round intermediate calculations. Enter your
answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.)
Effective annual interest rate
19.98 %
< Prev

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