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Papa Joe’s Pizza purchased a used pizza oven for $10,000. The company makes a down payment...

Papa Joe’s Pizza purchased a used pizza oven for $10,000. The company makes a down payment of $1500 and agrees to 36 monthly payments of $280 per month. What effective annual interest rate is Papa Joe’s Pizza charged? How much of the loan principal was paid off after the third payment?

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Answer #1

Effective annual interest rate is 12.04% (1+0.95%)^12-1

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