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Npv formula to get the npv of the loan

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Reference no: EM131101102

Sachin has asked his flat mate Jason for a $450 loan to cover a portion of his rent and utility costs. Sachin proposes repaying the loan with $375 from each of his next two financial aid disbursements, the first 4 months from now and the second 13 months from now. Jason's alternative is to earn 5% annually in his money market account. Assume there is no risk of default, and that compounding is monthly. What is the NPV of the loan from Jason's perspective? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)HINT It's a  NPV problem. Draw the timeline on an Excel sheet with cashflows. You have your initial investment and the all the cashflows thereafter, he receives 375 dollars at the 4 month and 13 month. Use the NPV formula to get the NPV of the loan.

Reference no: EM131101102

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