10) A lender wishes to earn a continuous 5.4% interest on a loan of $5,000 to be repaid with interest at the end of 5 years. The lender anticipates a default rate of .01 (1%) and that, in the event of a default the payment will be 85% of what is due. a) If the lender charges 5.4% what is the anticipated continuous effective rate of interest? b) What rate must the lender charge to earn a continuous effective rate of 5.4%? 10) A lender wishes to earn a continuous 5.4% interest on a loan of $5,000 to be repaid with interest at the end of 5 years. The lender anticipates a default rate of .01 (1%) and that, in the event of a default the payment will be 85% of what is due. a) If the lender charges 5.4% what is the anticipated continuous effective rate of interest? b) What rate must the lender charge to earn a continuous effective rate of 5.4%