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Question
Do not use the APR formula for this problem. Coverall Carpets Inc. is planning to borrow $12,000 from the bank. The bank offers the choice of a 12 percent discounted interest loan or a 10.19 percent add-on, one-year installment loan, payable in 4 equal quarterly payments. What is the effective rate of interest on the 10.19 percent add-on loan?
a. 9.50%
b. 10.19%
c. 15.22%
d. 16.99%
Answer
This answer is hidden. It contains 138 characters.
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