Explain which of these situations you would prefer

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Reference no: EM131305467

Suppose you are about to borrow $15,000 for four years to buy a new car. Briefly explain which of these situations you would prefer to be in:

a. The interest rate on your loan is 10%, and you expect the annual inflation over the next four years to average 8%.

b. The interest rate on your loan is 6%, and you expect the annual inflation rate over the next four years to average 2%.

Reference no: EM131305467

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