At what rate of interest would you be indifferent

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Reference no: EM131976037

Question: Five years ago you incurred a 10-year term loan that required annual payments of $1, 150 per year. You have made four payments in previous years and the fifth payment is due today. The note holder proposes that you buy back this note today for $4, 359.

a. Would it pay you to borrow the money at the bank at 13% interest rate and buy back this note

b. At what rate of interest would you be indifferent

Reference no: EM131976037

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