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Sylvia takes a loan for $50,000 at 5% interest. She decides to pay the loan over 10 years using annual payments at the end of
Sylvia takes a loan for $50,000 at 5% interest. She decides to pay the loan over 10 years using annual payments at the end of each year. a) Find her annual cost if she amortizes the loan b) Find her annual cost if she uses a sinking fund earning 6%. c) Find the net amount of interest she pays for both of these options. d) She decides to set her annual cost based on the amortization cost. But she pays only the interest due to the bank and deposits the balance in her using a sinking fund earning 6%. At the end of the 10 years she uses the Sinking Fund to repay the loan. How much is the balance of the Sinking Fund after she repays the loan
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