You are in desperate need of cash and turn to your uncle, who has offered to lend you some money. You decide to borrow $1,240 and agree to pay back $1,853 in 2 years. Alternatively, you could borrow from your bank that is charging 6.5 percent interest annually. Should you go with your uncle or the bank?

You are in desperate need of cash and turn to your uncle, who has offered to lend you some money. You decide to borrow $1,240 and agree to pay back $1,853 in 2 years. Alternatively, you could borrow from your bank that is charging 6.5 percent interest annually. Should you go with your uncle or the bank?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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