What is the difference of the total interest paid

Assignment Help Business Economics

Reference no: EM13740102

Arian is about to borrow $2,000 from his uncle. He has an option to repay the loan at the end of year 4 with 5.43% simple interest per year or with 8.99% interest per year, compounded every 5 months. What is the difference of the total interest paid over 4 years between the two options? (Enter the answer as a positive number)

Reference no: EM13740102

Questions Cloud

What are the key features of the consumption function : What are the key features of the consumption function? What causes consumption to rise or fall? Does the level of consumption deserve concern today?

Utility function indicate relationship between pizza-beer : Suppose you have a budget of $52 to spend of pretzels and beer. Your utility function is U = 15p + 18b – 0.5p2 – 0.5b2. The price of a small bag of pretzels is $2, and the price of a pint of beer is $4. Does the utility function indicate a relationsh..

What is the future value of the total revenue : A major defence supplier expects to generate additional revenue from its recently won government contract. The company expects the revenue will be $110 million in the first year and the revenue increasing by $2.5 million each year for the next 4 year..

Part of the navigation acts : Demand-Supply Analysis and the American Revolution a. Before the American Revolution, the British government required that all imports to the colonies from outside the British Empire were first shipped to England (part of the Navigation Acts). A Bost..

What is the difference of the total interest paid : Arian is about to borrow $2,000 from his uncle. He has an option to repay the loan at the end of year 4 with 5.43% simple interest per year or with 8.99% interest per year, compounded every 5 months. What is the difference of the total interest paid ..

Gdp is a reasonably good measure of a nations output : Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the inco..

Hence share the monopoly profit using trigger strategies : Consider an infinitely repeated Cournot duopoly with discount factor ? 0, and inverse demand functions p(Q)=a-bQ, with a>c and b>0. Find the condition on the discount factor, ?,for which the two firms could successfully collude over the monopoly outp..

Annual cash flow increases-annual interest rate : Calculate the present worth of the following geometric gradient series cash flow: Annual interest Rate =8.89 %, Annual cash flow increases 29% each year, The first year value is $52 and the series is 8 yrs long starting at EOY 1.

What is the present value of total revenue at interest rate : A major electronics manufacturer expects to generate additional revenue from its recently won government contract. The company forecasts that the revenue will be $108,937 million in the first year, but will decline by $2,295 million every year for th..

User Account

All Pages