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1. One takes out a loan of 2000 dollars and is to be paid back at the end of 5 years. The borrower makes end
1. One takes out a loan of 2000 dollars and is to be paid back at the end of 5 years. The borrower makes end of the year deposits into a sinking fund which earns 2 percent interest (effective) and the fund is used to pay off the loan in full at the end of the term. The borrower pays 5 percent interest (effective) on the principal at the end of each year. 10 points: what is the total payment P (sinking fund plus interest) each year? 10 points: Calculate 451.05&.02 1. One takes out a loan of 2000 dollars and is to be paid back at the end of 5 years. The borrower makes end of the year deposits into a sinking fund which earns 2 percent interest (effective) and the fund is used to pay off the loan in full at the end of the term. The borrower pays 5 percent interest (effective) on the principal at the end of each year. 10 points: what is the total payment P (sinking fund plus interest) each year? 10 points: Calculate 451.05&.02
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