You are purchasing a new combine from a local dealer and plan on financing the purchase through the dealer's financing subsidiary. The list price is $425,000 and, since you have purchased equipment from the dealer in the past, you are receiving a 5 percent 'repeat business' discount off the list price. You are making a down payment of 14 percent of the final purchase price and you will finance the remaining amount. Your marginal tax rate is 20 percent. The loan terms include:

a contract interest rate of 8.00 percent,

a 7-year loan term,

semi-annual payments, and

an origination fee equal to 3.00 percent of the amount financed.

Question 8

What is your after-tax annual percentage rate (APR) on this loan?