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Zara Corporation borrowed RM100,000 from their bank for one year. The bank required the company to pay RM9,500 in interest at the end of the

Zara Corporation borrowed RM100,000 from their bank for one year. The bank required the company to pay RM9,500 in interest at the end of the year plus maintain a minimum balance of RM10,000 with the bank in a chequing account throughout the year.

What is the effective interest rate on this loan?

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