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Susan loans 10000 to Jim. Jim repays the loan with yearly instalments at the end of each year. Interest is expected to be 5% the
Susan loans 10000 to Jim. Jim repays the loan with yearly instalments at the end of each year. Interest is expected to be 5% the first five years, and 10% the last five years. Calculate the outstanding balance at the end of the fourth year, right after the payment is made, using
(a) the prospective method.
(b) the retrospective method.
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