Question: Five years ago you incurred a 10-year term loan that required annual payments of $1, 150 per year. You have made four payments in previous years and the fifth payment is due today. The note holder proposes that you buy back this note today for $4, 359.
a. Would it pay you to borrow the money at the bank at 13% interest rate and buy back this note
b. At what rate of interest would you be indifferent