Annual effective interest rate

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Steve took a loan of $10,000 at the annual effective interest rate is 7.5%. He wishes to pay the loan back in full at the end of the 10 years with the balance of a sinking fund created specifically for that purpose. He makes the interest payments at the end of the every year. At the time of each interest payment he also makes a payment to the sinking fund, which earn 5% annual effective interest rate. The first payment to the sinking fund is X and every payment will increase by 10 from the previous payment. Calculate X.

Reference no: EM131097884

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