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You need to borrow 100000 for one year for your business


You need to borrow $100,000 for one year for your business. You are quoted an add-on interest rate of 12%. Payments are monthly.

a. What are the cash flows of the loan?

t=0:

t=1-12:

b. What is the periodic monthly rate?

c. What is the EAR (effective annual rate) of the loan?

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Finance Basics: You need to borrow 100000 for one year for your business
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