A couple buying a new house wants to decide between two types of loans with different maturities. 20 in first credit 12,000 TL at the end of each year throughout the year, and 7,000 TL at the end of each year for 30 years in the second loan. This couple will calculate the current values of the loans to understand which loan is better. They are trying to calculate. The interest rate (f') they use in the calculation is 2%. Present value of loans Calculate and indicate which loan is more suitable.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A couple buying a new house wants to decide
between two types of loans with different
maturities. 20 in first credit 12,000 TL at the end of
each year throughout the year, and 7,000 TL at the
end of each year for 30 years in the second loan.
This couple will calculate the current values of the
loans to understand which loan is better. They are
trying to calculate. The interest rate (f') they use in
the calculation is 2%. Present value of loans
Calculate and indicate which loan is more suitable.
Transcribed Image Text:A couple buying a new house wants to decide between two types of loans with different maturities. 20 in first credit 12,000 TL at the end of each year throughout the year, and 7,000 TL at the end of each year for 30 years in the second loan. This couple will calculate the current values of the loans to understand which loan is better. They are trying to calculate. The interest rate (f') they use in the calculation is 2%. Present value of loans Calculate and indicate which loan is more suitable.
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