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A ten year loan of 10,000 at 8% annual effective can be repaid using any of the four following methods: (1) Amortization method, with annual
A ten year loan of 10,000 at 8% annual effective can be repaid using any of the four following methods: (1) Amortization method, with annual payments at the end of each year. (ii) Repay the principal at the end of ten years while paying the 8% annual effective interest on the loan at the end of each year. In addition, make equal annual deposits at the end of each year into a sinking fund earning 6% annual effective so that the sinking fund accumulates to 10,000 at the end of the 10th year. (iii) Same as (ii), except the sinking fund earns 8% annual effective. (iv) Same as (ii), except the sinking fund earns 12% annual effective. Rank the annual payment amounts of each method. O a. iv
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