Question
Eileen R Edwards was going to get $17,147 from an aunt. The money was going to be deposited into her bank account in 17 months.
Eileen R Edwards was going to get $17,147 from an aunt. The money was going to be deposited into her bank account in 17 months. However, she wanted to buy a car today. She went to the bank to borrow cash, using the $17,147 that she was going to get as security. The bank says that she can get $16,147 today. a. What interest rate is the bank charging expressed on a compounded six times a year basis? [4] b. How much would she be able to borrow if she were to repay the bank only $13,147 in 17 months, but then make a further payment of $5,000 five months later (i.e. 22 months from today)? Assume that the same interest rate as calculated in part (a) applies. [6] c. Who is/was Eileen R Edwards?
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