You need a loan in the amount of $10,000 with a repayment period of 5 years. You did some market research, and it seems that you have two options as follows:

Pay $3,000 per year at BMO or

Pay 15,000 at the end of the 5-year period at CIBC.
What option is better. The interest/discount rate is 10% at both banks.

Answer rating: 100% (QA)

To compare the two options we need to calculate the present values of the cash flows and choose the ... View the full answer