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Dev borrows $6000 from his bank to pay for a truck-driving course. He plans to pay the...
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Dev borrows $6000 from a bank that has to be repaid in 5 years. The interest rates offered to him are:
7% compounded annually
Here, the amount due after 5 years is equal to `6000*(1.07)^5 = 8415.31`
6.5% compounded half yearly
Here, the amount due after 5 years is equal to `6000*(1.0325)^10 = 8261.36`
It is better for Dev to opt for the loan at an interest rate of 6.5% compounded half yearly.
Posted by justaguide on January 11, 2012 at 2:13 PM (Answer #1)
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