Dominic borrows 7200 dollars today, and agrees to repay the loan
by making annual interest payments to the lender, and by also
accumulating a sinking fund with increasing annual deposits to
repay the principal. The interest rate on the loan is 8.8 percent,
and the interest paid on the sinking fund is 6.7 percent, both
effective. If the loan is to be settled 15 years from now, and the
sinking fund deposits increase by 7 dollars per year, what is
Dominic's total outlay at the end of the 6th year? (Assume the
first interest payment and sinking fund deposits are both due in
one year.)
Answer = dollars.
So here I calculate interest through sinking fund account and interest account and here is the Dominic's total outlay.
Dominic borrows 7200 dollars today, and agrees to repay the loan by making annual interest payments...
Barbara borrows $3000. She agrees to make monthly interest payments on the loan and will build up a sinking fund with monthly deposits to repay the principal with a single payment 19 months from now. If the interest being charged on the loan is j12 = 8.5% and the interest being earned on the sinking fund is j12 = 5.4%, what is the monthly cost of the debt for Barbara?
Barbara borrows $3500. She agrees to make monthly interest payments on the loan and will build up a sinking fund with monthly deposits to repay the principal with a single payment 21 months from now. If the interest being charged on the loan is j12 = 8% and the interest being earned on the sinking fund is j12= 5.2%, what is the monthly cost of the debt for Barbara? I got 182.95 but is wrong. please help
Tom borrows $100 at annual effective interest rate of 4% and agrees to repay it with 30 annual installments. The amount of each payment in the last 20years is set at twice that in the first 10 years. At the end of 10 years, Tom has the option to repay the entire loan with a final payment $X, in addition to the regular payment. This will yield the lender an annual effective rate of 4.5% over the 10-year period. Calculate...
A city borrows $500,000 and agrees to pay interest semi-annually at i=10%. a). What semi-annual deposits must be made into sinking fund earning interest at r=6% in order to repay the debt in 15 years? b). What is the total semi-annual expense of the debt?
A 65,000 annual payment loan is made for a term of 10 years at 7.3% interest. The lender wants only payments of interest until the end of year 10 when the 65,000 must be repaid. The borrower will make level annual year-end payments to a sinking fund earning 4.8%. Find the level sinking fund deposit and the balance in the sinking fund at time 5. find the total payment and the principal in the 6th payment.
A lender providing a loan of $7 million requires semi-annual payment of interest at a nominal rate of 7.9% per year, and repayment of the $7 million principal at the end of 13 years. The borrower plans to accumulate that principal for repayment at the end of 13 years using level semi-annual deposits into a sinking fund that earns interest at a nominal rate of 3.2% per year when compounded semiannually. What is the borrower's total cash outlay every 6...
A lender providing a loan of $8.5 million requires semi-annual payment of interest at a nominal rate of 6.4% per year, and repayment of the $8.5 million principal at the end of 11 years. The borrower plans to accumulate that principal for repayment at the end of 11 years using level semi-annual deposits into a sinking fund that earns interest at a nominal rate of 5.9% per year when compounded semiannually. What is the borrower’s total cash outlay every 6...
Helen borrows $20000 to be repaid over 15 years with level annual payments with an annual effective interest rate of 8%. The first payment is due one year after she takes out the loan. Helen pays an additional $4000 at the end of year 9 (in addition to her normal payment). At that time (the end of year 9) she negotiates to pay off the remaining principal at the end of year 14 with a sinking fund. The sinking fund...
thumbs up for correct solution 10. Anita borrows 540,000 at annual effective interest rate 3%. She repays this loan by paying off only the interest due at the end of each year to the lender and depositing a level amount Q at the end of each year into a sinking fund account paying 6% APY. The goal is to accumulate the full balance of the loan amount in the sinking fund at the end of 10 years. a. Find the...
A twenty-year loan of $25000 is negotiated with the borrower agreeing to repay principal and interest at 5%. A level payment of $1500 will apply during the first ten years, and a higher level payment will apply over the remaining ten years. Each time the lender receives a payment from the borrower, he will deposit the portion representing principal into a sinking fund with an annual effective interest rate of 4%. (This is the amount for replacement capital). What is...