(4 points) Paddington Bear takes a 7-year loan at a 4.75% nominal annual interest compounded quarterly. Starting 3 months after the loan was made, Paddington must make quarterly interest-only payments to the lender. He must also accumulate the principal to be repaid in a sinking fund that earns a nominal annual interest of 2% compounded quarterly. Paddington's quarterly outlay in relation to the loan is 233.84. Find how much Paddington borrowed.

Answer = ?

Hint:

1. The quarterly outlay is the sum of the interest-only payment and the amount that Paddington has to deposit in the sinking fund.

2. Convert the interest rates to equivalent rates that are the easiest to use.

(4 points) Paddington Bear takes a 7-year loan at a 4.75% nominal annual interest compounded quarterly. Starting 3 months after the loan was made, Paddington must make quarterly interest-only payments to the lender. He must also accumulate the principal to be repaid in a sinking fund that earns a nominal annual interest of 2% compounded quarterly. Paddington's quarterly outlay in relation to the loan is 233.84. Find how much Paddington borrowed. Answer = Click for a hint 1. The quarterly outlay is the sum of the interest-only payment and the amount that Paddington has to deposit in the sinking fund. 2. Convert the interest rates to equivalent rates that are the easiest to use