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Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

EFFECTIVE INTEREST RATE You borrow $85,000; the annual loan payments are $8,273.59 for 30 years. What interest rate arc you being charged?

Summary Introduction

To calculate: Interest rate charged.

Interest rate: Interest rate is an amount of money, which a lender charge from the borrower to lends its money for borrowers use. The interest rate as well as interest term varies as per the terms of agreement between the lender and the borrower. The best example of interest rate is the amount, which is earned from bank on depositing the money.

Explanation

Solution:

Compute rate of interest with the help of “RATE” function of spreadsheet.

Given,

Borrowed money is $85,000.

Annual payment is $8,273...

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Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)