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Kristen is in process of purchasing a car. The list price of the car is $36,000. If Kristen pays cash for the car, the dealer
Kristen is in process of purchasing a car. The list price of the car is $36,000. If Kristen pays cash for the car, the dealer will reduce the price by 10%. Otherwise, the dealer will provide financing where Kristen must pay $7,705 at the end of each of the next five years. Compute the effective interest rate to the nearest percent that Kristen would pay if she choose to make the five annual payments?
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