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The bank charges 4000 for closing costs on a 200000 loan

The bank charges $4,000 for closing costs on a $200,000 loan with an annual percentage rate of 8.5% compounded monthly with a term of thirty years. The bank will not allow the closing costs to be added to the $200,000 borrowed. What effect do the closing costs have on the effective annual interest rate?

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Finance Basics: The bank charges 4000 for closing costs on a 200000 loan

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