Question: Bryan borrows 8,500 for 12 years at an annual effective interest rate of 8 %. He can repay this loan using the amortization method with

Bryan borrows8,500for12years at an annual effective interest rate of8%. He can repay this loan using the amortization method with payments of1,800at the end of each year.Instead, Bryan repays the8,500using a sinking fund that pays an annual effective interest rate of12%. The deposits to the sinking fund are equal to1,800minus the interest on the loan and are made at the end of each year for12years.

Determine the balance in the sinking fund immediately after repayment of the loan.

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