Interest payment that is paid monthly to service the loan

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Reference no: EM131881990

A loan of 20,000 is repaid with monthly payments for 5 years using the sinking fund method. The loan charges 10% interest compounded twice a year. The sinking fund earns an annual e ective interest rate of 8%. Calculate:

1) the interest payment that is paid monthly to service the loan.

2) the amount in the sinking fund immediately after the 30th payment.

Reference no: EM131881990

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