Anita has borrowed $1,000 on which interest is charged at 6% effective.Anita is accumulating a sinking fund at 4% effective to repay the loan.At the end of 5 years, the balance in the sinking fund is $587.82.At the end of the 6^th year, Ada makes a total payment of $168.53.

(a) How much of the $168.53 pays interest currently on the loan?

(b) How much of the $168.53 goes into the sinking fund?

(c) How much of the $168.53 should be considered as net interest?

(d) How much of the $168.53 should be considered as principal?

(e) What is the sinking fund balance at the end of the 6^th year?

Answer rating: 100% (QA)

a Loan principal will remain 1000 because payments have been in sinking fund therefore ... View the full answer