Excel is not allowed Smith can repay $300, 000 one of two ways.

(i) By 25 constant annual payments at the end of each year, at an effective annual interest rate of 13%.

(ii) By 25 annual interest payments to the lender at an effective annual interest rate jL along with 25 constant annual deposits into a sinking fund earning an effective annual interest rate of jI = 11% at the end of each year.

Find jL so that the schemes are equivalent (that is, so that the total amount paid at the end of each year for both options are equal.