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If You Borrow $20 000 as a Five-Year Loan from the Bank

Question 23

Multiple Choice

If you borrow $20 000 as a five-year loan from the bank and the bank requires you to make end-of-year payments of $4878.05, what is the annual interest rate on this loan?


A) 8 percent
B) 6 percent
C) 7 percent
D) 9 percent

Correct Answer:

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