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Maloney's effective financing rate of borrowing dinar

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Maloney Manufacturing Company obtains a one-year loan of 2,000,000 Sudanese dinar (SDD) at an interest rate of 6%. At the time the loan is extended, the spot rate of the dinar is $.005. If the spot rate of the dinar at maturity of the loan is $.0035, what is the effective financing rate of borrowing dinar?

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The solution computes effective financing rate of borrowing dinar with the given data.

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