Outstanding balance in the sinking fund

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An investor borrows RM3000 for four years at an annual effective interest rate of i%. The investor pays interest at the end of each year and accumulates the amount necessary to repay the principal at the end of four years by making level payments at the end of each year into a sinking fund. The sinking fund earns an annual effective interest rate of 8%. The total annual payment, including both interest on the loan and sinking fund deposit, is 965.76. i) Calculate i. ii) Outstanding balance in the sinking fund at the end of year two.

Reference no: EM132745159

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