RM60,000 is borrowed for 12 years at 5% compounded annually. The borrower does not pay interest currently and will pay all accrued interest at the end of 12 years together with the principal.
(a) Find the amount annual sinking fund deposit necessary to liquidate the loan at the end of 12 years if the sinking fund earns 3% yearly compounding and the borrower make first payment immediately.
(b) Prepared a sinking fund schedule.
Ans: (a) RM 7,371.25
(PLS DUN ANSWER IN EXCEL FORMAT) (pls STATE THE FORMULA USED IN DETAIL)
Answer of 1 :
p = r/m
------------------ x A
(1 + r/m)n*m -1
Answer of 2 :
Compound interest(%) | Ammount of compund interest | Formula | |
Answer Of 2: | |||
60,000 | 5% | 3000 | A3+B3 |
2nd year | |||
63,000 | 5% | 3150 | |
3rd year | |||
66,150 | 5% | 3307.5 | a5+c5 , a7*b7 |
4th year | |||
69,458 | 5% | 3472.875 | a7+c7 , a9*b9 |
5th year | |||
72,930 | 5% | 3646.51875 | |
6th year | |||
76,577 | 5% | 3828.844688 | |
7th year | |||
80,406 | 5% | 4020.286922 | |
8th year | |||
84,426 | 5% | 4221.301268 | |
9th year | |||
84,426 | 5% | 4221.303768 | |
10th year | |||
88,647 | 5% | 4432.368956 | |
11th year | |||
93,080 | 5% | 4653.987404 | |
12th year | |||
97,734 | 5% | 4886.686774 | |
After 12th year | |||
102,620 |
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