Sinking fund method


A borrower is repaying the loan with the 10 annual installments of $2000. Half of the loan is repaid by amortization technique at an effective rate of i = 0.06. The other half of the loan is repaid by the sinking fund method in which the lender receives i = 0.06 and the sinking fund accumulates at i = 0.05. Find the amount of the loan to the nearest dollar.

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Financial Management: Sinking fund method
Reference No:- TGS0875135

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