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You're offered a loan for $500,000 at an APR of 10%. The loan is for 4 months and interest is only paid at the end.
You're offered a loan for $500,000 at an APR of 10%. The loan is for 4 months and interest is only paid at the end. The loan has a compensating balance requirement of 8% of the amount borrowed that reduces the usable loan amount. What is the effective annual rate of the loan?
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