Luther Industries Is Offered a $1 Million Dollar Loan for Four

question 2

Multiple Choice

Luther Industries is offered a $1 million dollar 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%
• E)7.5%

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