Kelly has borrowed 1000 on which she is paying interest at 11^% effective per year. She is
Question:
Kelly has borrowed 1000 on which she is paying interest at 11^%
effective per year. She is accumulating a sinking fund at 9%
effective to repay the loan. At the end of the eighth year, the borrower makes a total payment of 149.06.
(a) How much of the 149.06 pays interest on the loan?
(b) How much of the 149.06 goes into the sinking fund?
(c) What is the sinking fund balance at the end of the eighth year?
(d) In which year will the principal be paid off?
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Theory Of Interest And Life Contingencies With Pension Applications A Problem Solving Approach
ISBN: 978-1566983334
3rd Edition
Authors: Asa Michael M. Parmenter, Ph.d.
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