Assignment 1: TIME VALUE OF MONEY Objective: To further understand the concept of the time value of money. INSTRUCTIONS: In each problem, a. Translate data given in problems into their respective graphical representations - i.e. draw the correct cash flow diagram. b. Write down all pertinent given information or data on your paper. c. Calculate answers correctly. 4. A lump-sum loan of $5,000 is needed by Chandra to pay for college expenses. She nas obtained small consumer loans with 12% interest per year in the past to help pay for college. But her father has advised Chandra to apply for a PLUS student loan charging only 8.5% interest per year. If the loan will be repaid in full in five years, what is the difference in total interest accumulated by these two types of student loans?
Assignment 1: TIME VALUE OF MONEY Objective: To further understand the concept of the time value of money. INSTRUCTIONS: In each problem, a. Translate data given in problems into their respective graphical representations - i.e. draw the correct cash flow diagram. b. Write down all pertinent given information or data on your paper. c. Calculate answers correctly. 4. A lump-sum loan of $5,000 is needed by Chandra to pay for college expenses. She nas obtained small consumer loans with 12% interest per year in the past to help pay for college. But her father has advised Chandra to apply for a PLUS student loan charging only 8.5% interest per year. If the loan will be repaid in full in five years, what is the difference in total interest accumulated by these two types of student loans?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assignment 1: TIME VALUE OF MONEY
Objective: To further understand the concept of the time value of money.
INSTRUCTIONS:
In each problem,
a. Translate data given in problems into their respective graphical representations - i.e. draw
the correct cash flow diagram.
b. Write down all pertinent given information or data on your paper.
c. Calculate answers correctly.
4. A lump-sum loan of $5,000 is needed by Chandra to pay for college expenses. She nas
obtained small consumer loans with 12% interest per year in the past to help pay for
college. But her father has advised Chandra to apply for a PLUS student loan charging
only 8.5% interest per year. If the loan will be repaid in full in five years, what is the
difference in total interest accumulated by these two types of student loans?
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