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Working with Simple and Compound Interest

If you borrow $500 from a credit union at 12% annual interest and $250 from a bank at 18% annual interest, what is the effective annual interest rate (that is, what single rate of interest on $750 would result in th same total amount of interest)?

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Annual interest for one year at the rate 12% for $500 is given by,

I = Principal amount x number of years x rate/100

= 500*1*12/100 = 60 ...

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