You need to borrow $2,000 quickly, and the local pawn shop will give it to you if you promise to repay them $200.92 monthly over the next year.
Suppose that the pawn shop's cost of funds is 12%, compounded monthly. From its viewpoint, what
Is the NPV of this deal?
A) $44.11
B) $111.01
C) $226.17
D) $261.37
E) $292.01

Question

Quizplus · Accepted Answer

The Answer of You need to borrow $2,000 quickly, and the local pawn shop will give it to you if you promise to repay them $200.92 monthly over the next year.
Suppose that the pawn shop's cost of funds is 12%, compounded monthly. From its viewpoint, what
Is the NPV of this deal?
A) $44.11
B) $111.01
C) $226.17
D) $261.37
E) $292.01

You Need to Borrow $2,000 Quickly, and the Local Pawn