What was the effective interest rate the engineer paid

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A new engineering graduate who started a consulting borrowed money for 1 year to furnish the office. The amount of the loan was $23,800, and it had an interest rate of 10% per year. However, because the new graduate had not built up a credit history, the bank made him buy loan-default insurance that cost 5% of the loan amount. In addition, the bank charged a loan setup fee of $300. What was the effective interest rate the engineer paid for the loan?

Reference no: EM13189025

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