A 10-year loan of 25,000 is to be repaid with payments at the end of...
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Accounting
A 10-year loan of 25,000 is to be repaid with payments at the end of each year. It can be repaid under the following two opions: (a) Equal annual payments at an annual effective rate of 7
.6%. (b) Installments of 2,500 each year plus interest on the unpaid balance at an annual effective rate of
i. The sum of the payments under option (a) equals the sum of
the payments under option (b). Determine
i.
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