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A company can pay the fire insurance premiums on its factory either quarterly or annually. If paid annually, the premium is $3600, paid at the
A company can pay the fire insurance premiums on its factory either quarterly or annually. If paid annually, the premium is $3600, paid at the beginning of the year. If paid quarterly, there is a $30 fee added to each $900 payment. If the company pays annually, what effective annual interest rate is it earning? (Note that each quarterly payment is paid at the beginning of the quarter.)
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The company pays 3600 annually If they pay quarterly they pay 900 30 ...Get Instant Access to Expert-Tailored Solutions
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