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Question: mr smith has been approved by finco a finance company...

Question details

Mr. Smith has been approved by Finco, a finance company, for a one year loan with a principal of $2,000, an annual simple interest rate of 10%, and interest due at maturity date. 

a.  Represent the flow-of-funds diagram and the balance sheets of the parties involved at the time the loan is granted.

b.  Represent the flow-of-funds diagram and the balance sheets of the parties involved at maturity date.

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