Problem 10. You have loaned Mr. Brown $1,000 on the condition that he repay you in ten equal annual installments at 4% annual effective rate of interest. The fifth installment is now due. You and Mr. Brown agree that for $525 in addition to the fifth installment, the loan will be paid off. What is your yield rate under this arrangement?

Problem 10. You have loaned Mr. Brown $1,000 on the condition that he repay you in ten equal annual installments at 4% annual effective rate of interest. The fifth installment is now due. You and Mr. Brown agree that for $525 in addition to the fifth installment, the loan will be paid off. What is your yield rate under this arrangement?

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 9FPE

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