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What is the effective interest rate for the loan

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Reference no: EM132760405

Question: Solve the following question providing step by step solution:

Someone has offered to loan you $1,200 now for two months if you will pay him back $612 at the end of the month for the next two months.

A. What is the effective interest rate for this loan?

B. If the bank interest rate is 9% per year, has your friend offered you a good deal? Why?

Reference no: EM132760405

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