Question: You borrowed $ 1 0 0 today to install a sprinkler system. You will need to repay this at the end of 5 years. At

You borrowed $100 today to install a sprinkler system. You will need to repay this at the end of 5 years. At the end of each year you pay interest of 5 percent on the amount you have borrowed. What is the overall cost of your borrowing in todays money? Your firm using a discount rate of 3 percent per year. (Hint: Consider information in chapter 4.)

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