You pay off a $200, 000 loan at effective annual interest rate 10% by making interest payments each year and paying off the principle in one lump sum at the end of 20 years.

You make deposits into a sinking fund earning an effective annual interest rate of 12% at the end of each year in such a way that the total outlay is X for the first 10 years and X + 10, 000 for he next 10 years. Find X.

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Sinking Fund Investment of 1 per year made at 12 interest per annum will fetch the following proceed... View the full answer