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Nineteen years ago, the Archer Corporation borrowed $6.650,000. Since then, cumulative Inflation has been 75 percent (a compound rate of approximately 3 percent per year)
Nineteen years ago, the Archer Corporation borrowed $6.650,000. Since then, cumulative Inflation has been 75 percent (a compound rate of approximately 3 percent per year) a. When the firm repays the original $6.650,000 loan this year, what will be the effective purchasing power of the $6,650,000? (Hint Divide the loan amount by one plus cumulative Inflation.) (Do not round Intermediate calculations and round your answer to the nearest whole dollar.) Effective purchasing power b. To maintain the original $6,650,000 purchasing power, how much should the lender be repald? (Hint: Multiply the loan amount by one plus cumulative Inflation.) (Do not round Intermediate calculations and round your answer to the nearest whole dollar.) Loan repayment
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