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Kareem wants to buy a car and goes to the dealer. He likes one particular car then He's offered the following purchasing options 1. SAR
Kareem wants to buy a car and goes to the dealer. He likes one particular car then He's offered the following purchasing options 1. SAR 100,000 for cash payment 2. SAR 122,000 for equal monthly installment payments for 2 years with no downpayment (Murabaha 3. Conventional financing of SAR 100,000 with monthly installments over 2 years at an annual interest rate of 10% compounded month A. What is the implied rate of interest in the Murabaha option (Use the present value formula and show your work B. What is the final cost of Option 3 (Future Value) show your work
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