5. A loan L is repaid with twenty annual payments. The total amount of each payment is $1,200. The first payment occurring when the loan is made. Half the loan is an amortized loan with at annual effective interest rate of 8%. The other half of the loan is to be repaid by the sinking fund method with the lender receiving an annual effective interest rate of 7.5%, and the sinking fund account earning 3% annual effective interest. Find the amount L of the loan.
5. A loan L is repaid with twenty annual payments. The total amount of each payment is $1,200. The first payment occurring when the loan is made. Half the loan is an amortized loan with at annual effective interest rate of 8%. The other half of the loan is to be repaid by the sinking fund method with the lender receiving an annual effective interest rate of 7.5%, and the sinking fund account earning 3% annual effective interest. Find the amount L of the loan.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 11P
Related questions
Question
![5.
A loan L is repaid with twenty annual payments. The total amount of
each payment is $1,200. The first payment occurring when the loan is made. Half the
loan is an amortized loan with at annual effective interest rate of 8%. The other half of
the loan is to be repaid by the sinking fund method with the lender receiving an annual
effective interest rate of 7.5%, and the sinking fund account earning 3% annual effective
interest. Find the amount L of the loan.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f3b962b-c4ad-495d-91e1-b125255748dc%2F7ee2fd37-b2f6-496d-b436-d43dbbd6d8b0%2Fd3nw6g_processed.png&w=3840&q=75)
Transcribed Image Text:5.
A loan L is repaid with twenty annual payments. The total amount of
each payment is $1,200. The first payment occurring when the loan is made. Half the
loan is an amortized loan with at annual effective interest rate of 8%. The other half of
the loan is to be repaid by the sinking fund method with the lender receiving an annual
effective interest rate of 7.5%, and the sinking fund account earning 3% annual effective
interest. Find the amount L of the loan.
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