Question
A loan of $100,000 at 8% per annum is to be repaid over 10 years; $20,000 by the amortization method and $80,000 by the sinking-fund
A loan of $100,000 at 8% per annum is to be repaid over 10 years; $20,000 by the amortization method and $80,000 by the sinking-fund method, where the sinking fund can be accumulated with annual deposits at j4 = 5%.
What extra annual payment does the above arrangement require as compared to repayment of the whole loan by the amortization method?
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Annual payment Loan amount x Rate x 1Rate N 1Rate N1 Annual payment 100000 x 8 x 18 10 ...
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Finite Mathematics and Its Applications
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
12th edition
978-0134768588, 9780134437767, 134768582, 134437764, 978-0134768632
