Can you please confirm the interest rate for the yen calculcations? It is 5% annual interest or 5% semiannual interest (meaning 10% annual interest)? If these numbers are accurate, the difference between the choices is staggering.
Good question, its paid annually
Than I will do it as it is written.Doing it in dollars goes as follows:Borrow $500,000,000. Pay (500,000,000*0.005) $2,500,000 in fees. Over the course of the loan, pay 20 interest payments of (500,000,000 * 0.11 * 0.5) $27,500,000 each totalling $550,000,000. Total interest and fees comes to $580,000,000Doing it in yen goes as followsBorrow ¥125,000,000,000. There are no fees. There are the same 20 interest payments, but this time they are (125000000000 * 0.05 * 0.5) ¥3,125,000,000 totaling 62,500,000,000. Converting this back to dollars to compare, the total interest payments come to $250,000,000. Borrowing the money in yen saves $330 million. I cannot see any reason to borrow in dollars and pay twice as much.
Thanks! I appreciate the help!
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