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A firm has borrowed from a bank to invest in a project. The loan calls for a payment of $17,500 every month for three years.

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A firm has borrowed from a bank to invest in a project. The loan calls for a payment of $17,500 every month for three years. The lender quoted the firm a rate of 8.40% (APR) with monthly compounding. What is the effective annual rate (EAR)? 8.44% 8.95% 8.73% 8.40%

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