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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 xxxx xxx xxx xx xxxx if xxx xxx xxxx xxxxxxxxxx xxxxxx

xxxxxxx

xxxx

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**Effective xxxxxxxx xxxx = Interest Amount x xxxxxxxxx * Days xx xxxx (360) xxxxx xxxx xxxxxxxxxxxx**

**xxxxxxxxxxx x xxxxxxxx**

** x 12.5%
**

**Rate on xxxxxxxxxxx xxxx =**

**B) (2 × x × $500)/ (3 × xxxxxxx = xxxxxxxxxxxxxx = xxxxxxx**

**C) (2 × x × $500)/ xx × xxxxxxx x xxxxxxxxxxxxxx x 20.00%
**

**xxxxx × 12 × xxxxxx xxx × $4,000) = $12,000/$52,000 = xxxxxxx**

# _1271762707.unknown

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## the answer is

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xx xxx xxxxxx $4,000 at xxxx interest xxx one year, what xx your xxxxxxxxx interest rate xxx xxx following rate xxx xxx xxxxxxxxx xxxxxxx plans?

xxxxxxxxx rate = (2 x xxxxxx no. xx xxxxxxxx x xxxxxxxxxxxxxxxxxxx x (total xxxxxx xx payments xxx

xx xxxxxx payment x no. xx xxxxxxxxx

effective rate x xx x x x xxxxxxxxx x x = 12.5%

B) xxxxxxxxxx xxxxxxxx =no. of payment=2

xxxxxxxxx rate x xx x x x xxxxxxxxx x 3 x 16.67%

C) Quarterly payments xxxx xx payment=4

effective rate x xx x 4 x 500)/4000 x 5 = xxxxxx xxx

D) Monthly payments=no. xx payment=12

effective xxxx x (2 x xx x 500)/4000 x xx x xxxxxx

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