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Ms Smith Borrowed $2,000 at an 8% Stated Rate of Interest

Question 31

Multiple Choice

Ms. Smith borrowed $2,000 at an 8% stated rate of interest and was to pay back the loan in 24 monthly payments. What is her effective rate of interest using the installment loan formula?


A) 10.5%
B) 15.4%
C) 18.9%
D) 22.0%

Correct Answer:

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