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# 3.You borrow $10,000 from Friendly Finance for four years with quarterly payments keyed to a 10% interest rate.$1,000 interest each year plus $10,000 equals $14,000.Spread

3.You borrow $10,000 from Friendly Finance for four years with quarterly payments keyed to a 10% interest rate.$1,000 interest each year plus $10,000 equals $14,000.Spread over 4 years this loan generates payments of $875 per quarter.**What is your annual effective borrowing rate?**

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