Question
Agus borrows $10,000 for 10 years at an annual effective rate of 10%. He can repay this loan using the non-level amortization with the first
Agus borrows $10,000 for 10 years at an annual effective rate of 10%. He can repay this loan using the non-level amortization with the first payments of P at the beginning of each year, and the next payments are increased by 3% each year. Instead, Agus repays the loan using sinking fund method that pays an annual effective rate of 14%. The deposits to the sinking fund are equal to the amortization payment minus the interest on the original loan at each period, and are made at the beginning of each year for 10 years. Note that interest on the original loan is paid at the end of each year. Determine the remaining balance in the sinking fund account immediately after the repayment of original loan.
SHOW YOUR WORK
please answer correctly
(theory of mathematic interest)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started