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1) A company takes out a 3-year loan to borrow $6,000 to purchase a new piece of equipment at an interest rate of 5% per
1) A company takes out a 3-year loan to borrow $6,000 to purchase a new piece of equipment at an interest rate of 5% per year. If the lender agrees to a simple interest arrangement, what amount of money must be repaid to the lender at the end of three years? Draw the cash flow diagram from the perspective of the company. (5 points) 2) A company takes out a 3-year loan to borrow $6,000 to purchase a new piece of equipment at and interest rate of 5% per year. If the lender agrees to a compound interest arrangement, what amount of money must be repaid to the lender at the end of three years? Draw the cash flow diagram from the perspective of the lender. (5 points)
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