What would the rate legally have to be quoted as

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Reference no: EM13890156

A local finance company quotes an interest rate of 19.5 percent on one-year loans. So, if you borrow $46,000, the interest for the year will be $8,970. Because you must repay a total of $54,970 in one year, the finance company requires you to pay $54,970/12, or $4,580.83 per month over the next 12 months.

1. What would the rate legally have to be quoted as?

2. What is the effective annual rate?

Reference no: EM13890156

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What would the rate legally have to be quoted as : A local finance company quotes an interest rate of 19.5 percent on one-year loans. So, if you borrow $46,000, the interest for the year will be $8,970. Because you must repay a total of $54,970 in one year, the finance company requires you to pay $54..

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