What is the nominal annual interest rate bank is receiving

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Reference no: EM13238935

A local bank will lend a customer $1000 on a 2-year car loan as follows:

Money to pay for car = $1000
Two years' interest at 7%:
2 x 0.07 x 1000 = 140
24 monthly payments = (1000+140)/24 = $47.50

The first payment must be made in 30 days. What is the nominal annual interest rate the bank is receiving?

Reference no: EM13238935

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