Recently, I received yet another promotion from yet another company offering me money at zero percent interest with the predictable asterisk next to the zero percent. Instead of just shredding the offer I decided to create a downloadable Excel template to analyze the offer, which was an interest-free 18 month loan for a 4% transaction fee with a minimum $10 fee.
Obviously, the transaction fee makes sure that the money is not ‘free.’ So, how does one calculate the cost of the loan? I settled on an “effective interest rate.”
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