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Big Brothers, Inc. borrows $431,375 from the bank at 13.20 percent per year, compounded annually, to purchase new machinery. This loan is to be repaid in equal annual instalments at the end of each year over the next7 years. How much will each annual payment be?
Round the answer to two decimal places
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The lender deducts this interest amount from the loan up front and gives you $17,500. In this case, we say that the discount is $2,500. What is the effective interest rate?
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