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You are given the opportunity to make an investment in a unique financial instrument. If you invest, you would receive cash flows over the next
You are given the opportunity to make an investment in a unique financial instrument. If you invest, you would receive cash flows over the next several years in the following manner (assume that the end of "Year 1 is one full year from today): Year 1: $11,000 Year 2: $13,000 Year 5: $11,000 You could personally invest this cash and receive a 8% annual return. What is the present value of this financial instrument? Please write your answer, without any dollar sign in fron, rounded to the nearest whole dollar! 28817 You are looking to take out a $56,000 loan to pay for school. The loan would be a five-year loan. The lender offers you a 9% interest rate on the loan and also offers to structure it in one of three ways: a) As a discount loan b) As an interest-only loan c) As an amortized loan. Rounded to the nearest whole dollar, what will be your balance at the end of year 1 if you take the loan as a: a) discount loan? 61040| b) interest-only loan? 56000 c) amortized loan? 68930 Which of these loans will collect the lowest amount of interest over the life of loan? A. interest-only loan B. discount loan C. amortized loan
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