Components of current micro-loan interest rates

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-The following data is from a microfinance institution (MFI) from Indonesia relating to the components of their current micro-loan interest rates:

-Capital costs = 6%

-Operating costs = 7%

-Tax expenditures = 3%

-Defaulted loans = 3%

-Net profit after tax = 5%.Calculate the effective sustainable interest rate. Show all calculations. (Show answer as a percentage, correct to 2 decimal places.)

Reference no: EM133080815

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