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A loan of $1,000 at effective rate of interest of 6% per year is to be redeemed over 5 years by a sinking fund that
A loan of $1,000 at effective rate of interest of 6% per year is to be redeemed over 5 years by a sinking fund that credits interest at 5.5% with reinvestment rate of interest of 5%.
Construct repayment schedules using (A) prospective amortization method, and (B) retrospective amortization method. Excel solution preferred.
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