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Leya [2.2K]
3 years ago
9

The Rasputin Brewery is considering using a public warehouse loan as part of its​ short-term financing. The firm will require a

loan of $ 500 comma 000. Interest on the loan will be 10.0 % ​(APR, annual​ compounding) to be paid at the end of the year. The warehouse charges 1.00 % of the face value of the​ loan, payable at the beginning of the year. What is the effective annual rate​ (EAR) of this warehousing​ arrangement?

Business
1 answer:
marusya05 [52]3 years ago
4 0

Answer

The answer and procedures of the exercise are attached in the image below.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

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