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What is the effective annual return to the lender on loan

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A company receives a 5-year 8% accrued interest $100,000 principal loan. Principal (and accrued interest) is only paid at the end of 5 years. The company must pay the lender 4% fees up front and has to give the lender an equity interest in the company expected to be worth $15000 in 5 years. What is the effective annual return to the lender on the loan?

Reference no: EM132466019

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