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You Owe the Bank $2000 in 9 Months

Question 59

Multiple Choice

You owe the bank $2000 in 9 months.Instead you negotiate with the bank to pay $1200 in 3 months and $X in 7 months to fully pay off the loan.Using a simple discount rate of d = 9% and a focal date of 7 months from now,what is X?


A) $732.89
B) $734.44
C) $866.46
D) $877.08

Correct Answer:

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