A bank advertises loans with an annual interest rate of 6

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A bank advertises loans with an annual interest rate of 6%. If you borrow $40,000 from the bank and pay it back with equal annual payments over 7 years,

(a) What is your annual payment?

(b) What is the total interest (in dollars) you have paid to the bank over the life of the loan? Show a cash flow diagram from the standpoint of the borrower. Show your work and final answer(s).

Reference no: EM13617554

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