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AJ has borrowed 100,000 from the bank using the sinking fund method. His loan has 6% nominal monthly interest rate and interest payable at the
AJ has borrowed 100,000 from the bank using the sinking fund method. His loan has 6% nominal monthly interest rate and interest payable at the end of each month for 10 years. His sinking fund earns 5% compounded monthly with level deposits required at the end of each month. His total monthly payment is 1,143.99, consisting of 500.00 of interest to service the loan and 643.99 for his sinking fund deposit. After 5 years, he finds a new account with an interest rate of 7% convertible monthly. He is able to transfer the accumulated amount in his sinking fund to this new account and all future deposits. Calculate his new sinking fund deposit that with his transferred balance will accumulate to 100,000 at the end of the term. 529.59 785.06 611.72 867.20
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