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Question

Suppose you lent $\$ 5000$ to friend $1$ for $18$ months at an annual simple interest rate of $9 \%$. After $1$ year, you need money for an emergency and decide to sell the note to friend $2$.

(a) How much does friend $1$ owe when the loan is due?

(b) If your agreement with friend $2$ means that she earns simple interest at an annual rate of $12 \%$, how much did friend $2$ pay you for the note?

Solution

VerifiedAnswered 1 year ago

Answered 1 year ago

Step 1

1 of 11In this exercise, the task is to determine the future value of the loan and the case when the friend earns a $12\%$ annual simple interest considering the given input data.

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