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What would be the real cost of borrowing in the following case? A home equity loan is advertised at three percent compounded monthly, however, there
What would be the real cost of borrowing in the following case? A home equity loan is advertised at three percent compounded monthly, however, there is a legal fee of $450 and appraisal fee of $450 to set up the house as collateral. If Sarah needs to borrow $20000 for one year, at which time will be able to repay the full amount, what is the effective rate of borrowing the $20000 for the year? a. 3.04% b. 7.54% c. 4.50% d. 7.50% Clear my choice
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