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Suppose that you need to take out a loan today and anticipate being able to pay back $50,000 sixteen years from now. a. If the (annual) interest rate is 8%, how much can you afford to borrow now? b. How much will be accumulated in interest alone? c. By what overall percentage does the account value grow over the course of 16 years? (Round your answer to the nearest hundredth of a percent.)

Suppose that you need to take out a loan today and anticipate being able to pay back $50,000 sixteen years from now. a. If the (annual) interest rate is 8%, how much can you afford to borrow now? b. How much will be accumulated in interest alone? c. By what overall percentage does the account value grow over the course of 16 years? (Round your answer to the nearest hundredth of a percent.)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Suppose that you need to take out a loan today and anticipate being able to pay back $50,000 sixteen years from now. a. If the (annual) interest rate is 8%, how much can you afford to borrow now? b. How much will be accumulated in interest alone? C. By what overall percentage does the account value grow over the course of 16 years? (Round your answer to the nearest hundredth of a percent.)
Transcribed Image Text:Suppose that you need to take out a loan today and anticipate being able to pay back $50,000 sixteen years from now. a. If the (annual) interest rate is 8%, how much can you afford to borrow now? b. How much will be accumulated in interest alone? C. By what overall percentage does the account value grow over the course of 16 years? (Round your answer to the nearest hundredth of a percent.)
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