A farmer needs to borrow $2,500. The local PCA will make a 2-year loan fully amortized at 12% with quarterly payments. A $10 dollar loan fee and stock purchase is required. There is a 4% stock requirement.
(i) What is the actuarial rate?
a. 15.2% b. 3.80%
c.12.55% d. None of the answers are correct
(ii) What is the APR?
a. 3.80% b. 15.2%
c. 12.55% d. None of the answers are correct
(iii) What is the effective rate?
a.15.2% b. 12.55%
c. 3.80% d. None of the answers are correct