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You are given a loan on which interest is charged over a 3 year period as follows:
an effective rate of discount of 6% for the first year
a nominal rate of discount of 5% compounded every 2 years for the second year
a nominal rate of interest of 5% compounded semiannually for the third year
Calculate the annual effective rate of interest over the three years.
** I need a full explanation please and explain why you use every formula.
Thanks
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