A borrower is faced with choosing between two loans. Loan A is available for $89,000...
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Accounting
A borrower is faced with choosing between two loans. Loan A is available for $ at percent interest for years, with points to be included in closing costs. Loan B would be made for the same amount, but for percent interest for years, with points to be included in the closing costs. Both loans will be fully amortizing.
Required:
a If the loan is repaid after years, which loan would be the better choice?
b If the loan is repaid after five years, which loan is the better choice? Analyze the decision with both rates at two decimal places.
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