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Consider two loans with? one-year maturities and identical face? values: a(n) 8.0 %8.0% loan with a 1.00 %1.00% loan origination fee and? a(n) 8.0 %8.0%
Consider two loans with? one-year maturities and identical face? values: a(n)
8.0 %8.0%
loan with a
1.00 %1.00%
loan origination fee and? a(n)
8.0 %8.0%
loan with a
5.0 %5.0%
?(no-interest) compensating balance requirement. What is the effective annual rate
?(EAR?)
associated with each?loan? Which loan would have the highest EAR and? why? The EAR in the first case? % round to one decimal place
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