Which of these situations would be preferred

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Reference no: EM132021956

Suppose you are about to borrow $20000 for four years to buy a new car. Which of these situations would be preferred?

A. The interest rate on the loan is 18 %, and the annual inflation rate over the next four years is expected to average 9 %

B. The interest rate on the loan is 5 %, and the annual inflation rate over the next four years is expected to average 1 %.

Reference no: EM132021956

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