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A loan of $8,000 is repaid over 15 years using one of the following two methods: Amortization with annual end of year payments based on
A loan of $8,000 is repaid over 15 years using one of the following two methods: Amortization with annual end of year payments based on an annual effective rate of 9.25%. The sink fund method, where the borrower pays the lender interest at rate i at the end of each year. The borrower also makes end of year deposits into a sinking fund earning an annual effective rate of 7.5% to repay the principal in 15 years. Find the annual amortization payment to the nearest cent. Number Find the sink fund deposit to the nearest cent. Number Find the rate of interest i that will make both repayment methods have the same annual cost. (Give your answer in decimal format to 4 decimal places) Number
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