Question
A piece of furniture costs $2500. You can buy it now with cash or pay an amount of $3000 in 3 years. (a) At compound
A piece of furniture costs $2500. You can buy it now with cash or pay an amount of $3000 in 3 years.
(a) At compound interest rate of 10% annually, which option should you choose?
(b) At what compound effective annual rate, the two options are the same to you?
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
