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    Effective Annual Rate

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    The bank offers to lend the required $1,000,000 on a loan which requires interest to be paid at the end of each quarter. The quoted rate is 10 percent, and the principal must be repaid at the end of the year. What is the effective annual rates (EFF%) charged by the bank?

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    https://brainmass.com/business/finance/effective-annual-rate-153584

    Solution Summary

    The solution explains the calculation of effective annual rate.

    $2.49

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