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5. Tom plans to borrow $10,000 from Jerry and replay the loan in 5 years at a compound interest rate of 4% per year. (a)
5. Tom plans to borrow $10,000 from Jerry and replay the loan in 5 years at a compound interest rate of 4% per year. (a) complete the following two repayment plans (b) draw the cash flow diagrams of Plan B for Tom and Jerry, respectively. Plan A: Pay all at end End of Year Interest Owed for Year Total Owed at End of Year End-of-Year Payment Total Owed after Payment 10000 0 1 2 3 4 5 Totals Plan B: Portion of principle repaid annually, which means the accrued interest and one-fifth of the principal is repaid each year. ($) End of Year Interest Owed Total Owed at End-of-Year Total Owed for Year End of Year Payment after Payment 0 10000 1 2 3 4 5 Totals
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