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Suppose you take out a loan of amount L with monthly interest payments, and monthly deposits into the sinking fund, over a ten year period. 10,000 and repay it using the sinking fund method The lender charges you a nominal rate of 12% convertible monthly, while the sinking fund earns an annual effective interest rate of 5%. Calculate your total out-of-pocket payment each month. (а) 64.78 (b) 83.33 (с) 100 (d) 154.36 (е) 164.78

Suppose you take out a loan of amount L with monthly interest payments, and monthly deposits into the sinking fund, over a ten year period. 10,000 and repay it using the sinking fund method The lender charges you a nominal rate of 12% convertible monthly, while the sinking fund earns an annual effective interest rate of 5%. Calculate your total out-of-pocket payment each month. (а) 64.78 (b) 83.33 (с) 100 (d) 154.36 (е) 164.78

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Suppose you take out a loan of amount L = 10,000 and repay it using the sinking fund method with monthly interest payments, and monthly deposits into the sinking fund, over a ten year period. The lender charges you a nominal rate of 12% convertible monthly, while the sinking fund earns an annual effective interest rate of 5%. Calculate your total out-of-pocket payment each month. (а) 64.78 (b) 83.33 (c) 100 (d) 154.36 (е) 164.78
Transcribed Image Text:Suppose you take out a loan of amount L = 10,000 and repay it using the sinking fund method with monthly interest payments, and monthly deposits into the sinking fund, over a ten year period. The lender charges you a nominal rate of 12% convertible monthly, while the sinking fund earns an annual effective interest rate of 5%. Calculate your total out-of-pocket payment each month. (а) 64.78 (b) 83.33 (c) 100 (d) 154.36 (е) 164.78
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