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5. Compounding - Assume Lee, Inc. borrows $500,000 at 5.27% interest, compounded semiannually (twice per year). Lee, Inc. will repay the debt in a lump-sum
5. Compounding - Assume Lee, Inc. borrows $500,000 at 5.27% interest, compounded semiannually (twice per year). Lee, Inc. will repay the debt in a lump-sum at the end of an eight- year period. The amount Lee, Inc. is obligated to repay in eight years is $615,650 (rounded to the nearest dollar). a. Assume the interest on Lee, Inc.'s debt is, instead, compounded annually. What amount is the company obligated to repay at the end of the eight-year period? b. What amount is Lee, Inc. obligated to repay in eight years if interest on its $500,000 debt is compounded quarterly? c. What amount is Lee, Inc. obligated to repay in eight years if interest on its $500,000 debt is compounded monthly
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