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The Arthos Group Needs to Borrow $200,000 from Its Bank

Question 11

Multiple Choice

The Arthos Group needs to borrow $200,000 from its bank.The bank has offered the company a 12-month installment loan (monthly payments) with 9 percent add-on interest.What is the effective annual rate (EAR) of this loan?


A) 16.22%
B) 17.97%
C) 17.48%
D) 18.67%
E) 18.00%

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