12. A friend asks to borrow $55 from you and in return will pay you $58 in...

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12. A friend asks to borrow $55 from you and in return will pay you $58 in one year. If your bank is offering a 6% interest rate on deposits and loans:

a. How much would you have in one year if you deposited the $55 instead?

b. How much money could you borrow today if you pay the bank $58 in one year?

c. Should you loan the money to your friend or deposit it in the bank?

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Fundamentals Of Corporate Finance

ISBN: 9780134475561

4th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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