An individual can repay a loan of $250,000 over 30 years in one of two ways: 

• 30 annual level payments based on amortization at i = 0.12; 

• A 30-payment annuity-immediate using the sinking fund method. 

The loan rate i is 0.10 and sinking fund earns rate j. Find the value of j to make the schemes equivalent. If you have used any Excel function(s), in your solutions, write down the function and function arguments used to obtain the answer. 

Answer rating: 100% (QA)

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