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Anieta will receive $ 3 5 , 0 0 0 on her 2 2 nd birthday from a trust fund left to her by her
Anieta will receive $ on her nd birthday from a trust fund left to her by her grandmother. Anieta is a college student,
and has decided to borrow against the trust fund to cover the costs of tuition, room and board, books, and supplies. Since
she is currently years old, Anieta will only need a year loan. The following are the two loan proposals that Anieta is
considering and both require using the trust proceeds as collateral.
Tennessee State Bank will lend $ with a discount on interest. The loan principal would be due at the end of two
years. Key Bank will lend $ under a year note. The note would carry a simple interest rate and would aho be due
n a single payment at the end of two years.
If Anieta requests a loan with Tennessee State Bank, a How much will she receive in loan proceeds? b What whll sht
be required to pay back at maturity? c Compute the finance charges and APR on the Tennessee State Bankloan
proposal.
If Anieta requests a loan with Key Bank, a How much will she receive in loan proceeds? b What will she be reqt
to pay back at maturity? c Compute the finance charges and APR on the Key Bank loan proposal.
Compare your findings. Which loan option would you recommend to Anieta? pleasse explain.
SLEM S
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