In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $32,000 and the interest rate is 9.75%, the borrower pays .0975 $32,000 = $3,120 immediately, thereby receiving net funds of $28,880 and repaying $32,000 in a year.

(Can you explain the steps)

a.	What is the effective interest rate on this loan? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Effective interest rate

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