Question: Assume that you borrow $5000 and pay back the $5000 plus $250 in interest at the end of the year. Assuming no inflation, what is

Assume that you borrow $5000 and pay back the $5000 plus $250 in interest at the end of the year. Assuming no inflation, what is the real interest rate? What would the interest rate be if the $250 of interest had been discounted at the time the loan was made? What would the interest rate be if you were required to repay the loan in 12 equal monthly installments?

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