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I purchase a house for $500,000. I borrow the exact amount on a 20 year loan with an effective annual interest rate of 10%. I
I purchase a house for $500,000. I borrow the exact amount on a 20 year loan with an effective annual interest rate of 10%. I will pay off the loan using a sinking fund; I will make level interest payments and sinking fund payments every year. The sinking fund accrues interest at an effective annual interest rate of 5%. What is the balance in my sinking fund after 15 years?
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