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(9 points) A loan L can be repaid in one of two ways: 20 payments using the regular amortization method at annual rate of 8%

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(9 points) A loan L can be repaid in one of two ways: 20 payments using the regular amortization method at annual rate of 8% compounded annually; 20 payments using the sinking fund method. The effective annual rate on the loan i and the rate earned on the sinking fund is 4%. Compute i to make the two payments under the two methods equal. A. 6.67% B. 6.83% C. 7.03% D. 6.69% E. 6.99%

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