How much interest will be paid in year

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Problem a: You plan to borrow $75,000 at a 7% annual interest rate. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest will be paid in year 2?

What is the effective annual return for the following scenarios

1) An account that pays 8% nominal interest with annual compounding.

2) An account that pays 8% nominal interest with semi -annual compounding.

3) An account that pays 7.90% nominal interest with quarterly compounding.

You are considering the following two mutually exclusive projects. The required rate of return is 14.6% for Project A and 13.8 percent for project B. Which project should you accept and why?

Year        Project A              Project B

0         -$50000                -$50000

1          24,800                   41000

2          36200                    20000

3           21000                 10000

Reference no: EM132654869

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