Question: A local bank will lend a customer $1000 on a 2-year car loan as follows: Money to pay for car$1000 Two years' interest at 7%:

A local bank will lend a customer $1000 on a 2-year car loan as follows:

Money to pay for car$1000

Two years' interest at 7%: 2 x 0.07 x 1000140

24 monthly payments = 1140/24 = $47.50$1140

The first payment must be made in 30 days. What is the nominal annual interest rate the bank is receiving?

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