A borrower asks for a one-year $50,000 bank loan to purchase some furniture with interest...
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Finance
A borrower asks for a one-year $50,000 bank loan to purchase some furniture with interest rate of 12.5%. The different interest rate methods are offered by the bank to the borrower. (1) Under a simple rate method, what is interest on bank loan paid by the borrower based on quarterly instalment? (3%) (2) Under discount rate method, what is effective rate paid by the borrower? (3%) (3) Under add-on loan rate method, what is effect rate paid by the borrower? (3%) (4) Which method is best alternative for the bank? (3%)
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