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4. On 1/1/87, Cathy borrows $1,000 from ABS Finance Company and agrees to pay it back in five annual installments at an annual effective rate
4. On 1/1/87, Cathy borrows $1,000 from ABS Finance Company and agrees to pay it back in five annual installments at an annual effective rate of 11%. The first payment is due one year after the loan is issued. On 1/1/89 Cathy pays off the balance of the loan plus a $50 prepayment penalty. Find ABC's effective overall yield rate i. Select one: a. 12.8%
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