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question 7 7. A student loan of amount 10,000 is amortized over 20 years by continuing payment at 8 = 0.08. The loan is subject

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7. A student loan of amount 10,000 is amortized over 20 years by continuing payment at 8 = 0.08. The loan is subject to default at constant force of default 1 = 0.01. A government agency guarantees the outstanding balance of the loan in case of default. Using force of interest 0.05, calculate the APV of the guarantee

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