EAR versus APR Big Doms Pawn Shop charges an interest rate of 25 percent per month on

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EAR versus APR Big Dom’s Pawn Shop charges an interest rate of 25 percent per month on loans to its customers like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? What is the effective annual rate?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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Question Posted: Apr 28, 2011 02:29 AM

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EAR versus APR Big Doms Pawn Shop charges an interest rate of 25 percent per month on

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The APR is simply the interest rate per period times the number of periods in a year In this case t...View the full answer

Fundamentals of Corporate Finance

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