Make level annual year-end payments to sinking fund

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Reference no: EM131853634

1. Michelle takes out a loan for 50,000 and she agrees to pay the lender interest each year at an annual interest rate of 9%. She puts deposits in a sinking fund which earns 9% annually to pay off the loan at the end of 10 years. The amount of Michelle's total payment for the entire loan period is

2. A 70,000 annual payment loan is made for a term of 10 years at 8% (lender charge). The lender wants only the payments of interest until the end of year 10 when the 70,000 must be repaid. The borrower will make level annual year-end payments to a sinking fund earning 6%. The net interest paid during the 6th installment is

Reference no: EM131853634

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