### Calculating the loan amount

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##### Reference no: EM1334240

Suppose Subaru of America, Inc. wishes to borrow money from UBS. They agree on an annual rate of 10%.

1. Suppose Subaru agrees to repay \$500 million at the end of 4 years. How much will UBS lend Subaru?

2. Suppose Subaru agrees to repay a total of \$500 million at a rate of \$125 million at the end of each of the next 4 years. How much will UBS lend Subaru?

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