KBL Bank Limited quotes a 21 percent interest rate on one-year loans. So, if you borrow $75,000, the interest for the year will be $15,750. Because you must repay a total of $90,750 in one year, the...


KBL Bank Limited quotes a 21 percent interest rate on one-year loans. So, if you borrow $75,000, the<br>interest for the year will be $15,750. Because you must repay a total of $90,750 in one year, the Bank<br>requires you to pay $7,562.50 per month ($90,750/12) over the next 12 months.<br>a)<br>Is this a 21 percent loan? What rate would legally have to be quoted?<br>What is the effective annual rate?<br>

Extracted text: KBL Bank Limited quotes a 21 percent interest rate on one-year loans. So, if you borrow $75,000, the interest for the year will be $15,750. Because you must repay a total of $90,750 in one year, the Bank requires you to pay $7,562.50 per month ($90,750/12) over the next 12 months. a) Is this a 21 percent loan? What rate would legally have to be quoted? What is the effective annual rate?

Jun 06, 2022
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