2. Your mom will lend you money so long as you agree to pay her back within five years and you offer to pay her the rate of interest that she would otherwise get by putting his money in a saving account. Based on your earnings and living expenses, you think you will be able to pay him 8000$ in one year and then 10000$ each year for the following next four years. If your mom would otherwise earn 5% per year on her savings how much you can borrow from her?T

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 33P
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2. Your mom will lend you money so long as you agree to pay her back withın five years
and
you
offer to pay her the rate of interest that she would otherwise get by putting his
money in a saving account. Based on your earnings and living expenses, you think you
will be able to pay him 8000$ in one year and then 10000$ each year for the following
next four years. If your mom would otherwise earn 5% per year on her savings how
much
you can borrow from her?T
om
79 F
25
hp
Transcribed Image Text:2. Your mom will lend you money so long as you agree to pay her back withın five years and you offer to pay her the rate of interest that she would otherwise get by putting his money in a saving account. Based on your earnings and living expenses, you think you will be able to pay him 8000$ in one year and then 10000$ each year for the following next four years. If your mom would otherwise earn 5% per year on her savings how much you can borrow from her?T om 79 F 25 hp
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