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12.) Suppose you have agreed to a bank loan of $120,000, for which the bank charges no fees but 2 points. The quoted interest rate
12.) Suppose you have agreed to a bank loan of $120,000, for which the bank charges no fees but 2 points. The quoted interest rate is 0.5% per month. You are required to pay only the accumulated interest each month for the next 36 months, at which point you must make a balloon payment of the still-owed $120,000. What is the effective interest rate of this loan?
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