A pure discount loan of $20,000 to be received in 7 years issold in the...

A pure discount loan of $20,000 to be received in 7 years is sold in the marketplace today. (a) If it is sold at $16,000 what is the rate of return (APR) (b) What price would you pay for it if you want to earn 4% on such loans? Use equation or HP 10bll+ to answer. Do not use Excel.

Expert Solution

a)

b)

jeff jeffy answered 2 years ago

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