To go on a summer trip, Bob borrows s700. He makes no payments until the end of 4 years, when he pays off the entire loan. The lender charges simple interest at an annual rate of 5%. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Bob have to pay? (b) What will the total repayment amount be (including interest)?

To go on a summer trip, Bob borrows s700. He makes no payments until the end of 4 years, when he pays off the entire loan. The lender charges simple interest at an annual rate of 5%. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Bob have to pay? (b) What will the total repayment amount be (including interest)?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P

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