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East Coast Cleaners Borrows $20,000 for 120 Days and Pays

Question 18

Multiple Choice

East Coast Cleaners borrows $20,000 for 120 days and pays $400 interest. What is the effective rate of interest if the loan is discounted?


A) Less than 5.5 percent
B) More than 5.5 percent but less than 6.0 percent
C) More than 6.0 percent but less than 6.5 percent
D) More than 6.5 percent

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