=+4. A lender made the following statement to a bor- rower: You are borrowing $1,000, which is
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=+4. A lender made the following statement to a bor- rower: "You are borrowing $1,000, which is to be repaid in twelve monthly installments of $100 each. Your total interest charge is $200, which means your interest rate is 20 percent." Is the effective interest rate on the loan really 20 percent? Explain.
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Related Book For
Microeconomics Private And Public Choice
ISBN: 9780324320367
11th Edition
Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
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