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# Problem 18- If you borrow $4,000 at $500 interest for one year, what is your effective interest rate for the following rate for the following payment plans? A) Annual payment B) Semiannual payments C) Quarterly payments D) Monthly payments

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## Effective interest rate

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Please find xxxxxxxx file xxx xxx me know xx you xxx xxxx confusion. xxxxxx

xxxxxxx

xxxx

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**xxxxxxxxx xxxxxxxx rate = Interest xxxxxx / xxxxxxxxx * xxxx xx xxxx (360) xxxxx loan xxxxxxxxxxxx**

**xxxxxxxxxxx x xxxxxxxx**

** x xxxxxx**

**Rate xx xxxxxxxxxxx loan =**

**B) (2 × x × $500)/ (3 × $4,000) x $2,000/$12,000 = xxxxxxx**

**xxxxx × 4 × xxxxxx (5 × $4,000) = $4,000/$20,000 = xxxxxxx**

**xxxxx × xx × xxxxxx xxx × xxxxxxx x xxxxxxxxxxxxxxx = xxxxxxx**

# _1271762707.unknown

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## the answer is

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If you xxxxxx xxxxxx xx xxxx xxxxxxxx xxx one xxxxx what is your xxxxxxxxx interest xxxx xxx xxx xxxxxxxxx rate xxx xxx xxxxxxxxx payment xxxxxx

effective xxxx = xx x xxxxxx no. xx xxxxxxxx x xxxxxxxxxxxxxxxxxxx x (total number xx payments xxx

xx xxxxxx payment = xxx of xxxxxxxxx

effective xxxx = (2 x 1 x xxxxxxxxx x 2 = xxxxx

B) Semiannual payments xxxx xx payment=2

effective rate = xx x 2 x 500)/4000 x x x 16.67%

xx Quarterly xxxxxxxx xxxx xx xxxxxxxxx

effective xxxx = (2 x x x 500)/4000 x x x 12.5%= xxx

D) Monthly xxxxxxxxxxxx xx payment=12

effective xxxx x xx x 12 x 500)/4000 x 13 = xxxxxx

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