1. Ansizin-Bi-Infilak Ltd., is trying to buy a ship. Ship's listed price is $5,000,000. The firm can finance the ship with an installment loan. The interest rate on the loan is 10%, payments are monthly, and maturity of the loan is 3 years. Payments are calculated as:

   $5,000,000 x 10% = $500,000

   $500,000 x 3 years = $1,500,000

   $5,000,000 + $1,500,000 = $6,500,000

   $6,500,000 / (3 x 12) = $180,555.56

   Calculate the Effective Rate of Interest on the loan?

   		17.31%
   		19.47%
   		14.92%
   		21.47%