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Question
Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. What is the effective annual rate on the loan?a. 8.46%
b. 8.90%
c. 9.37%
d. 9.86%
e. 10.38%
Answer
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