Sinking fund immediately after repayment of the loan

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Mary borrows 5000 for 10 wars at an annual effective interest rate of 10%. She can repay this loan using the amortization method with repayments of 813.73 at the end of each year. Instead, she repays the 5000 using a sinking fund that pays an annual effective interest rate of 15%. The deposits to the sinking fund are equal to 813.73 minus the interest on the loan and are made at the end of each year for 10 years Determine the balance in the sinking fund immediately after repayment of the loan.

Reference no: EM131333416

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