Question
The lender of a loan of 100,000 receives annual interest payments at 12% per year for 10 years, and in addition, will receive a lump-sum
The lender of a loan of 100,000 receives annual interest payments at 12% per year for 10 years, and in addition, will receive a lump-sum repayment of the principal along with the 10th interest payment. The borrower will pay the annual interest to the lender and accumulate the 100,000 by annual deposits to an 8% sinking fund. The borrower wishes to schedule the deposits so that his total annual outlay is X for each of the first 5 years, and 2X for each of the final 5 years. Find X. Construct a table listing "outstanding balance, "principal repaid" and "net interest paid" for each t from 1 to 10.
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