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Jim loans 10000$ to Amanda immediately, 5000$ in 3 years and 1000$ in 4 years. Amanda repays Jim with two equal payments of Y $
Jim loans 10000$ to Amanda immediately, 5000$ in 3 years and 1000$ in 4 years. Amanda repays Jim with two equal payments of Y $ ; one payment of Y at the end of the fifth year and one payment of Y at the end of the sixth year, assuming a nominal interest rate of 6%, compounded monthly.
a) Draw a time diagram of the cash flows.
b) Evaluate Y.
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