Question: This is for Actuarial Financial Mathematics, please no excel. please show all your steps Jason and Margaret each take out a 17-year loan of L.
This is for Actuarial Financial Mathematics, please no excel. please show all your steps
Jason and Margaret each take out a 17-year loan of L. Jason repays his loan using the amortization method, at an annual effective interest rate of i. He makes an annual payment of 500 at the end of each year. Margaret repays her loan using the sinking fund method. She pays interest annually, also at an annual effective interest rate of i. In addition, Margaret makes level annual deposits at the end of each year for 17 years into a sinking fund. The annual effective rate on the sinking fund is 4.62%, and she pays the value of loan after 17 years. Margarets total payment each year is equal to 10% of the original loan amount.
(a) Find the interest rate i.
(b) Find the amount of the loan.
(c) Find the total interest paid by Margaret
(d) Find the total interest paid in the tenth year by Margaret
(e) Find the principle repaid in the eleventh year by Margaret
(f) Find the outstanding balance for Margaret after the thirtieth payments.
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