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Luther Industries Is Offered a $1 Million Loan for Four

Question 7

Multiple Choice

Luther Industries is offered a $1 million loan for four months at an APR of 9%.If this loan has an origination fee of 1%,then the effective annual rate (EAR) for this loan is closest to:


A) 12.0%.
B) 12.6%.
C) 4.1%.
D) 13.8%.

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