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Business, 25.11.2019 20:31 jahmira96

Dr. ruth is going to borrow $8,400 to write a book. the loan is for one year and the money can either be borrowed at the prime rate or the libor rate. assume the prime rate is 8 percent and libor 1.3 percent less. also assume there will be a $48 transaction fee with libor (this amount must be added to the interest cost with libor).

a.
what is the effective interest rate on the libor loan?

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