Blue Angel investors has a success ratio of 10% with its venture funding. Blue Angel requires a rate of return of 21.2% for its portfolio of lending, and the average length on its loans is 5 years. If you were to apply to Blue Angel for a $161,000 loan, what is the annual percentage rate you would have to pay for this loan?
Given,
Success ratio = 10%
Loan amount = $161000
Rate of return (r) = 21.2% or 0.212
Number of years (n) = 5 years
Solution :-
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