Answer to Question #115981 in Finance for Smith

Question #115981
Sachin has asked his flat mate Jason for a $400 loan to cover a portion of his rent and utility costs. Sachin proposes repaying the loan with $350 from each of his next two financial aid disbursements, the first 3 months from now and the second 12 months from now. Jason's alternative is to earn 4% 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?
1
Expert's answer
2020-05-17T18:27:53-0400

The installment paid in the first four month =







The next series of installment for 10 months from first payment















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