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TBTF Bank makes a 3 year interest only loan to AFC Inc of $ 2 , 350 , 000.00 . The interest rate on the
TBTF Bank makes a 3 year interest only loan to AFC Inc of $ 2 , 350 , 000.00 . The interest rate on the loan is i (52) = 12.500 % , and the payments will be made quarterly. TBTF reinvests the payments at an interest rate of i (26) = 14.250 % . At maturity, what is TBTF Bank's annual ROI over the lifetime of the loan? ( AFC does not default. )
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
