Question

An oil producer has purchased a pumping unit for $30,000, and the loan is to be...

An oil producer has purchased a pumping unit for $30,000, and the loan is to be paid back in 24 equal monthly installments of $1,771.43 per month. Calculate the nominal interest rate charged for this financing arrangement. Calculate the effective interest rate.
do not use excel and show full steps.
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Answer #1

nominal interest rate = 36%

Effective interest rate = 42.5761% or 42.58

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