# Fight Finance

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Jan asks you for a loan. He wants $100 now and offers to pay you back$120 in 1 year. You can borrow and lend from the bank at an interest rate of 10% pa, given as an effective annual rate.

Ignore credit risk. Remember:

$$V_0 = \frac{V_t}{(1+r_\text{eff})^t}$$

Will you or Jan's deal?