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2. To purchase a used front end loader your firm seeks to borrow $135,000 from a bank. The bank offers a seven year loan at
2. To purchase a used front end loader your firm seeks to borrow $135,000 from a bank. The bank offers a seven year loan at an interest rate of 4.0% compounded annually. If your firm chooses to make one payment at the end of the loan period, repaying all principal and interest at that time ( 2 points): a. Which equation should be used to solve the problem (number)? b. What total amount of money will be paid to the bank at the end of the load period? c. How many dollars of the total amount represent interest? (How much did it cost you to borrow the money?)
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