What is the effective annual rate of interest paid

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Erica and Jon just purchased a boat for $90,000. They were able to make a 10% down payment and the remaining balance was financed. The rate quoted by the bank was 7.2% APR financing with monthly payments. The loan has a 10 year amortization period and a 2 year term. (Timelines are not required.)

Required:

Problem i) What is the monthly payment?

Problem ii) What is the effective annual rate of interest paid?

Problem iii) How much is the balance owing at the end of the 2 year term?

Reference no: EM133009710

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