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To borrow $ 3 , 1 0 0 , you are offered an add - on interest loan at 9 . 9 percent with 1

To borrow $

3, 100,

you are offered an add

-

on interest loan at

9.9

percent with

12

monthly payments.

Compute the

12

equal payments. Use the amount you borrowed and the monthly payments you computed to calculate the APR of the loan. Then, use that APR to compute the EAR of the loan.

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