Fadette borrows $50,000 today and agrees to make the following payments: $15,000 in two years, $30,000 in
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Question:
Fadette borrows $50,000 today and agrees to make the following payments: $15,000 in
two years, $30,000 in 5 years and $20,000 in 6 years.
a) [5 points] Represent the schedule of the monetary flows mentioned from the lender's point of view.
b) [15 points] Determine the effective annual interest rate charged by the lender.
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