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Gary took out a loan of $2,300 at an annual effective rate of 6%. Level interest payments are made at the end of every year
Gary took out a loan of $2,300 at an annual effective rate of 6%. Level interest payments are made at the end of every year for 8 years, and the principal is repaid at the end of 8 years by the accumulation of a sinking fund earning 5% effective. Find the difference between the interest payment earned by the sinking fund and the interest payment on the loan.
Answer: $730.88
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