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Matt's Machine Company Has Borrowed $10 Million for Four Months

Question 30

Multiple Choice

Matt's Machine Company has borrowed $10 million for four months at 5.5% APR,using inventory stored in a field warehouse as collateral.The warehouse fee is 0.5%,payable at the end of the loan.What is Matt's EAR?


A) 5.5%
B) 7.20%
C) 0.58%
D) 7.01%
E) 3.46%

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