Calculating Interest Rate. You borrow $1,000 from the bank and agree to repay the loan over the
Question:
Calculating Interest Rate. 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, the bank also charges you a loan-initiation fee of $20, 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?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Study Guide To Accompany Fundamentals Of Corporate Finance
ISBN: 9780073012421
5th Edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Question Posted: