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What kind of return would you be earning in this new deal

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Question - Your friend in problem 3 comes up with another way to pay off the $300 he borrowed from you. He has reputable friend who is going to pay your friend $400 in 4 years (to cover a loan he had made to him earlier). Your friend would just have this reputable person pay you the $400 instead in order to liquidate the $300 loan he made from you. Since you know this is an honest and reputable person, you would consider this deal if you earned at least 7% per year on the deal. What kind of return would you be earning in this new deal?

Reference no: EM133036427

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