The First Federal Bank has advertised one of its loan offerings as follows: We will lend you

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The First Federal Bank has advertised one of its loan offerings as follows:

“We will lend you $100,000 for up to 5 years at an APR of 9.5% (interest compounded monthly.)” If you borrow $100,000 for 1 year and pay it off in one lump sum at the end of the year, how much interest will you have paid and what is the bank’s APY?


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