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Question 1 of 8

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The farm equipment loan is modelled over one year

No repayments are included in this one-year model

The initial loan balance for the farm equipment loan is $60,000. At the end of one year, it is exactly $62,160

Calculate the effective annual rate to 2 decimal places

2 marks

Express the one-year proportional change as an effective annual rate

Format: 2 d.p.