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loan of $5000 is taken out today. It is due with interest at j4 = 8% in 2 years. Instead, the borrower negotiates with the lender ny payment at j₂ = 5%, what is the value of X? A. $3038.93 B. $2493.59 OC. $3581.68 D $3395 34

loan of $5000 is taken out today. It is due with interest at j4 = 8% in 2 years. Instead, the borrower negotiates with the lender ny payment at j₂ = 5%, what is the value of X? A. $3038.93 B. $2493.59 OC. $3581.68 D $3395 34

Essentials Of Investments
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
Section: Chapter Questions
Problem 1PS
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A loan of $5000 is taken out today. It is due with interest at j4 = 8% in 2 years. Instead, the borrower negotiates with the lender to pay $2500 in 1 year and $X in 3 years. If the lender can reinvest any payment at j₂ = 5%, what is the value of X? OA. $3038.93 OB. $2493.59 OC. $3581.68 D. $3395.34
Transcribed Image Text:A loan of $5000 is taken out today. It is due with interest at j4 = 8% in 2 years. Instead, the borrower negotiates with the lender to pay $2500 in 1 year and $X in 3 years. If the lender can reinvest any payment at j₂ = 5%, what is the value of X? OA. $3038.93 OB. $2493.59 OC. $3581.68 D. $3395.34
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