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Question 2: This is a two part problem. Part 1: Bill makes a loan to a neighbor of $15,000 (i.e., the principal of the loan
Question 2: This is a two part problem. Part 1: Bill makes a loan to a neighbor of $15,000 (i.e., the principal of the loan is $15,000). The neighbor agrees to pay back the principal of the loan over 5 years in 5 equal payments at the end of each year. In addition, the neighbor agrees to pay 10% simple interest on the unpaid principal each year. What is the amount of each of the five payments the neighbor will make? Part 2, suppose Bill's actual discount rate for money is 6%. What is the present value of the payments the neighbor will make to Bill
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