Solution-Sinking fund earns an annual effective interest

Sinking fund earns an annual effective interest rate of j

Reference no: EM131985801

A 20-year loan of 20,000 may be repaid under the following two methods:

(i) amortization method with equal annual payments at an annual effective interest rate of 6.5%

(ii) sinking fund method in which the lender receives an annual effective interest rate of 8% and the sinking fund earns an annual effective interest rate of j.

Both methods require a payment of X to be made at the end of each year for 20 years. Calculate j.

Reference no: EM131985801

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Sinking fund earns an annual effective interest rate of j

Reference no: EM131985801

Reference no: EM131985801

Questions Cloud

Reviews

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Mathematics Questions & Answers

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Finding the probability of cards

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Derive the boolean expression

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Introduction to numerical methods

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Mathematics in computing

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