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Cash Flow and Interest
Grade Level
GMAT
DI.196 Cash Flow and Interest
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A $55,000 loan is made for 7 months. A 1% fee is deducted from the proceeds, and the borrower repays $56,925 at maturity. What is the effective annual simple cost rate based on cash received, rounded to the nearest 0.1%?
A
7.8%
B
6.0%
C
4.5%
D
8.8%
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