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Problem 23 Intro Youre about to buy a new car for $10,000. The dealer offers you a one-year loan where you pay $871.73 every month for the next 12 months. Since you pay $871.73 12 $10,461 in total, the dealer claims that the loans annual interest rate is (10.461-10,000)/10,000 4.608%. Part 1 E -Attempt 9/10 for 12 pts. What is the actual effective annual rate? 3+ decimals Submit Show all partsanswer check before I submit my final answer

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Answer #1

The given explanation is wrong since money is given at different dates and hence time value of money should be taken into consideration. Attached is the image containing formula and calculations..

Anni 飞 ーgiven : -R: 4 871-73 a= 12-months 1000 8구)-73 x12 ㄧㄧㄚ-fi-et ラ Colving usine nsolue& we Acual eeetive annual ntes 34

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