A 12-month loan with principal balance of $2,500 and structured as a CPM style amortization having 6.00%

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A 12-month loan with principal balance of $2,500 and structured as a CPM style amortization having 6.00% fixed interest will cause the borrower to pay how much in interest on a pre-tax basis? (Note: Interest on loans in the U.S. is tax deductible. Therefore, the actual “cost” can be significantly less than the stated value. However, this text assumes all analyses are pre-tax.)

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