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Mr and Mrs

Question 252

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Mr. and Mrs. Chan are considering two offers on a building lot that they own in a nearby town. One is for $49,000, consisting of $10,000 down and the balance to be paid in a lump payment in eight months. The second is for $50,000, with $10,000 down and the balance to be paid in 1 year. What rate of return must money earn for Mr. and Mrs. Chan to be indifferent between the two offers?

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