Question: Is the question below an example of (Given a certain loan amount and sinking fund interest rate, calculate level payment to a sinking fund account.).
Is the question below an example of (Given a certain loan amount and sinking fund interest rate, calculate level payment to a sinking fund account.). If yes, how to solve the problem below. If no, provide an example and solve if you can.
The borrower in a $238,000 loan makes interest payments at the end of each six months for eight years. These are computed using an annual effective dis- count rate of 6.5%. Each time he makes an interest payment, the borrower also makes a deposit into a sinking fund earning a nominal interest rate of 4.2% convertible monthly. The amount of each sinking fund deposit is D in the first three years and 2D in the remaining five years, and the sinking fund balance at the end of the eight years is equal to the loan amount. Find D.
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