Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You owe 10000$ to a friend. He gives you the choices of paying back 10000$ today or 12800$ in 2 years or 14800$ in 3

image text in transcribed

You owe 10000$ to a friend. He gives you the choices of paying back 10000$ today or 12800$ in 2 years or 14800$ in 3 years. If the interest rate is 12% compound semi-annually, which option would be the most rational? 10000$ today. 12800$ in 2 years 14800$ in 3 years I'll be indifferent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Moolah Or Bummer A Humorous Look At Finance And Investing

Authors: Sharon Schwab

1st Edition

0595344313, 9780595344314

More Books

Students also viewed these Finance questions

Question

2. 16.2b What is homemade leverage?

Answered: 1 week ago