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Mr. Flynn asks the bank to lend him Rs. 100 today for setting up a shop. He will not be able to pay anything in

Mr. Flynn asks the bank to lend him Rs. 100 today for setting up a shop. He will not be able to pay anything in the first year and will pay the entire loan amount due at the end of the second year.

Tenor

Borrowing/Lending Rates

1 yr

2%

2 yr

4.50%

What combination of products would enable Mr. Flynn to ascertain the amount that should be repaid at the end of 2 years?

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