Problem
A student beginning her senior year in college borrows $5,500 using a Perkins loan with a 5% APR. Because of the subsidized interest, interest will not accrue during her final year of school, and because of the grace period, no interest will accrue for the first year after she graduates. Interest will start accruing one year after she graduates, and she will pay down the loan in ten annual installments beginning with a payment three years from now. Compute the implicit interest rate on this loan.