A loan is to be repaid in 33 equal annual installments of $5,000 each, commencing...
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A loan is to be repaid in 33 equal annual installments of $5,000 each, commencing one year from the date of the loan. Immediately after the 5th installment an additional $10,000 is borrowed and the remaining term on the first loan is reduced. Combined installment payments are to be made at the end of each year and both loans are to be completely repaid in fourteen additional annual installments. The effective annual rate of interest is 5%. In which of the following ranges is the amount of interest paid in the first installment on the combined basis? Possible Answers A $4,000 but $4,100 but $4,200 but $4,300
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