1) Altynai wishes to borrow 3 500 to buy a car. One lender offers a...
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1) Altynai wishes to borrow 3 500 to buy a car. One lender offers a loan in which the principal is to be repaid at the end of 4 years. In the meantime, Interest at 8% effective is to be paid on the loan, and the borrower is to accumulate her principal by means of annual payments into a sinking fund earning 10% effective. Another lender offer a loan for 4 years in which the amortization method will be used to repay the loan, with the first of the annual payments due in one year. Find the rate of interest, that this second lender can charge in order that Altynai finds the two offers equally attractive. Select one: 0 .0.703 ob. 0.492 0 0.896 O d. 0.602
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