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A new engineering graduate who started a consulting business borrowed money for 1 year to...

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Finance

A new engineering graduate who started a consulting business borrowed money for 1 year to furnish the office. The amount of the loan was $44,000, and it had an interest rate of 11% per year. However, because the new graduate had not built up a credit history, the bank made him buy loan-default insurance that costs $900. In addition, the bank charged a loan set-up fee of 0.8% of the loan principal. What was the effective interest rate the engineer paid for the loan? The effective interest rate that the engineer paid for the loan was %.

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