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6. Mr. Mosquito must repay a loan of amount L. The lender offers him two repayment options. These are as follows. (i.) 20,000 each at
6. Mr. Mosquito must repay a loan of amount L. The lender offers him two repayment options. These are as follows. (i.) 20,000 each at times t = = 1, 2, 3; (ii.) 60,000 at time T. At an annual effective interest rate of 10%, the lender is indifferent to which repayment option Mosquito decides on. (a) Find the exact value for T. (b) Find the approximation for T based on the method of equated time (dollar weighted average). Call it T. (c) See (b). If Mosquito decides on option (ii.) and makes the single payment at the time T, what is L minus the present value of this single payment
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