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A firm can borrow 200 000 at j1=9% and amortize the debt for 10 years. From a second source, the money can be borrowed at

A firm can borrow 200 000 at j1=9% and amortize the debt for 10 years. From a second source, the money can be borrowed at j2=8.5% if the interest is paid annually and the principal is repaid in a lump sum at the end of 10 years.

What yearly rate, j1 must the sinking fund earn for the annual expense to be the same under the two options?

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