Question 1192942
A: 4000=Po (1+(.07/4))^20, since there will be 20 separate times for compounding
4000=Po*1.414778
Po=$2827.30, amount of loan
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B. 4000/(1.055)^8=$2606.39
The loan in B is smaller by about $220. He will save money on the front end but will be paying interest three years longer.