Olivia borrows money from a bank today. The interest rate is 8.7% p.a. compounded half- yearly....
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Olivia borrows money from a bank today. The interest rate is 8.7% p.a. compounded half- yearly. She has 2 options to repay the loan: - Option A: She repays $9,000 in 9 years and $8,000 in 12 years. Option B: She makes a single repayment of X in 11 years. The two options are equivalent. Calculate X. - Olivia borrows money from a bank today. The interest rate is 8.7% p.a. compounded half- yearly. She has 2 options to repay the loan: - Option A: She repays $9,000 in 9 years and $8,000 in 12 years. Option B: She makes a single repayment of X in 11 years. The two options are equivalent. Calculate X. -
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To calculate the present value of Option A and compare it to the single repayment of Option B we wil... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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