Assume you want to borrow $5,000 for a period of five years. You have two...
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Accounting
Assume you want to borrow $5,000 for a period of five years. You have two choices. ANZ bank is offering to lend you the amount at 7.80% p.a.. You can also borrow from Westpac bank and will have to repay a total of $7,178.15 at the end of five years. Which bank should you go with, and what is the interest rate if you borrow from Westpac bank?
Part B
Wilson has signed a contract that will pay him $50,000 at the end of each year for the next three years, plus an additional $60,000 at the end of year 4. If the appropriate discount rate is 8%, what is the present value of this contract?
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