Question
A loan of $76,100 is due 10 years from today. The borrower wants to make annual payments at the end of each year into a
A loan of $76,100 is due 10 years from today. The borrower wants to make annual payments at the end of each year into a sinking fund that will earn compound interest at an annual rate of 10 percent.
Required:
a. What will the annual payments have to be?
Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
b. Suppose the investor makes the payments monthly instead. How much would they need to pay each month?
Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
c. If payment was made by making monthly payments with monthly compounding then how less they will pay in a year?
Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
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