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Bryan borrows 9,000 for 12 years at an annual effective interest rate of 9%. He can repay this loan using the amortization method with payments
Bryan borrows 9,000 for 12 years at an annual effective interest rate of 9%. He can repay this loan using the amortization method with payments of 1,800 at the end of each year.
Instead, Bryan repays the 9,000 using a sinking fund that pays an annual effective interest rate of 14%. The deposits to the sinking fund are equal to 1,800 minus the interest on the loan and are made at the end of each year for 12 years.
Determine the balance in the sinking fund immediately after repayment of the loan.
18,003
17,978
17,998
18,005
17,979
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