Calculate the amount of the revised annual payments

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1. Lori borrows $10,000 for 10 years at an annual effective interest rate of 9%. At the end of each year, she pays the interest on the loan and deposits the level amount necessary to repay the principal to a sinking fund earning an annual effective interest rate of 8%. The total payments made by Lori over the 10-year period is X. Calculate X.

2. A loan is being repaid with 25 annual payments of $300 each. With the 10th payment, the borrower pays an extra 1000, and then repays the balance over 10 years with a revised annual payment. The effective rate of interest is 8%. Calculate the amount of the revised annual payments.

Reference no: EM131989849

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