You Have Just Borrowed $20,000 to Buy a New Car

question 115

Multiple Choice

You have just borrowed $20,000 to buy a new car.The loan agreement calls for 60 monthly payments of $444.89 each to begin one month from today.If the interest is compounded monthly,then what is the effective annual rate on this loan?

• A) 12.68%
• B) 14.12%
• C) 12.00%
• D) 13.25%
• E) 15.08%

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