Question: John wants to purchase a car but needs $5,000 to do so. His uncle Eswar offers to loan him the money at 8% compounded yearly.

John wants to purchase a car but needs $5,000 to do so. His uncle Eswar offers to loan him the money at 8% compounded yearly. Uncle Shankar offers to loan him the money at 9% simple interest. If both loans are to be paid in a lump sum in 5 years, which loan should John choose?

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