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A loan of 1 2 0 0 is being repaid in ten years by semiannual installments of 6 0 , plus interest on the unpaid

A loan of

1200

is being repaid in ten years by semiannual installments of

60,

plus interest

on the unpaid balance at

10 %

per annum compounded semiannually. The installments

and interst payments are reinvested at

12 %

per annum compounded semiannually.

Calculate the annual effective yield rate of the loan.

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