A loan of $1,000 at effective rate of interest of 6% per year is to be redeemed
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Question:
A loan of $1,000 at effective rate of interest of 6% per year is to be redeemed over 5 years by a sinking fund that credits interest at 5.5% with reinvestment rate of interest of 5%. Calculate the annual installments of the annuity-immediate required to redeem the loan. What is the equivalent rate of interest using the amortization method?
What is the repayment schedule using the sinking fund method?
What is the repayment schedule using the amortization methods; the prospective method and the retrospective method?
Related Book For
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
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