Question
Read above informations carefully. Hasan and Hseyin borrow some money today (t=0) and have different payment plans for five years time. Market interest rate is
Read above informations carefully. Hasan and Hseyin borrow some money today (t=0) and have different payment plans for five years time. Market interest rate is 4% compounded annually. Hasan will pay it back with five equal installments of $1000 at each year. Hseyin will pay it back with two equal installments of $2000 which will start at 4th year (one at the end of year four and one at the end of year five). Solve the following questions?
What is Hasans borrowing amount? Draw cash flow diagram? You can draw only cash flow diagram on a paper and paste it to your answer sheet or directly upload to Ubis. (20p) What is Huseyins borrowing amount? Draw cash flow diagram? You can solve this item on a paper and paste it to your answer sheet or directly upload to Ubis. (20p) Who is profitable in this loan payments? Explain your reason? Write your sentences on Word, paper will not be accepted! (20p)
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