Question

Blue Angel investors has a success ratio of 10% with its venture funding. Blue Angel requires...

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?

Homework Answers

Answer #1

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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