John has a 20 year sinking fund loan of 250,000. Under the sinking fund loan,...
50.1K
Verified Solution
Link Copied!
Question
Finance
John has a 20 year sinking fund loan of 250,000. Under the sinking fund loan, he will pay the interest at the end of each year on the loan. Additionally, he will make a deposit into a sinking fund at the end of each year. The deposit into the sinking fund will be such that the amount in the sinking fund will exactly repay the loan at the end of 20 years.
The annual effective interest rate on the loan is 12% and the sinking fund pays an annual effective interest rate of 9%. John make deposits into the sinking fund for 12 years.
Determine the amount that John has in the sinking fund right after the 12th deposit.
A. 94,420.02
B. 95,420.02
C. 96,420.02
D. 97,420.02
E. 98,420.02
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
