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Kelowna Furniture would like to borrow $400,000 to renovate their store. Their bank has agreed to lend them the money for one year at a
Kelowna Furniture would like to borrow $400,000 to renovate their store. Their bank has agreed to lend them the money for one year at a rate of 6%. They will also be required to pay a loan processing fee of $5,000, payable at the beginning of the loan period. Find the annual effective rate of interest. Round you answer to 2 decimal places (e.g. 4.25%). | ||||
Elena is looking to expand her wine boutique. Her bank offered her a $10,000 6 month loan bearing 7% interest payable on a discounted basis. Find the annual effective rate of interest. Round you answer to 2 decimal places (e.g. 4.25%). | ||||
Okanagan Spirits is seeking a $50,000 loan for 90 days from Rose City Bank. The stated interest rate is 6% and the bank requires a 20% compensating balance. The company currently keeps a minimum balance of $3,000 on deposit with Rose City Bank. Find the annual effective rate of interest. Round you answer to 2 decimal places (e.g. 4.25%). | ||||
BONUS: What is the effective interest rate cost of not taking the discount when offered terms of 2/10, n/90? . Round you answer to 2 decimal places (e.g. 4.25%). |
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