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Homework answers / question archive / A friend asks you for a loan of $1,000 and offers to pay you back at the rate of $90 per month for 12 months

A friend asks you for a loan of $1,000 and offers to pay you back at the rate of $90 per month for 12 months

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A friend asks you for a loan of $1,000 and offers to pay you back at the rate of $90 per month for 12 months. a. Using an annual interest rate of 10%, find the net present value(to you) of loaning your friend the money. Repeat using an interest rate of 20%. b. Find an interest rate that gives a net present value of 0.

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