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You plan to borrow $8,000 in order to take a vacation and want to repay the loan in a year. The banker offers you a

You plan to borrow $8,000 in order to take a vacation and want to repay the loan in a year. The banker offers you a simple interest rate of 12% with repayments in equal installments three months, six months, nine months, and twelve months from now. What is your total interest bill? What is your effective yield? If the bank applied the discount method to your loan, what are the net proceeds of the loan? What is the effective yield?

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