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Jason and Margaret each take out a 17-year loan for L. Jason repays his loan using the amortization method at an annual effective interest rate

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Jason and Margaret each take out a 17-year loan for L. Jason repays his loan using the amortization method at an annual effective interest rate of i. He makes an annual payment of 500 at the end of each year, beginning one year after the loan is made. Margaret repays her loan using the sinking fund method. She pays interest annually (at the end of each year) also at an annual effective interest rate of i. In addition, Margaret makes level annual deposits at the end of each year for 17 years into a sinking fund with the first deposit being made one year after the loan was made. The annual effective rate on the sinking fund is 4.62%, and she pays off the loan at the end of 17 years, depleting the sinking fund entirely. Margaret's total annual outlay (i.e. interest on loan plus the deposit into the sinking fund) is equal to 10% of the original loan amount. Calculate the original loan amount L. (a) 4844 (b) 4943 (c) 5040 (d) 5141 (e) 5239

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