To travel to Japan via private plane, Jamaica made a P100,000 loan which is to be repaid over a term of 2 years at 7.2% interest convertible quarterly. The lender wants only payments of interest until the end of the term when the loan balance P 100,000 must be repaid in full. The borrower will make level quarter-end payments to a sinking fund earning 6% payable quarterly. a. How much is each quarterly sinking fund deposit? b. Calculate the net interest paid in the 6th payment. (Hint: Net interest = Total payment at time t - Principal paid at time t) c. Calculate the sinking fund balance immediately after the 6th payment is made.

To travel to Japan via private plane, Jamaica made a P100,000 loan which is to be repaid over a term of 2 years at 7.2% interest convertible quarterly. The lender wants only payments of interest until the end of the term when the loan balance P 100,000 must be repaid in full. The borrower will make level quarter-end payments to a sinking fund earning 6% payable quarterly. a. How much is each quarterly sinking fund deposit? b. Calculate the net interest paid in the 6th payment. (Hint: Net interest = Total payment at time t - Principal paid at time t) c. Calculate the sinking fund balance immediately after the 6th payment is made.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section6.1: Why Save?

Problem 6R

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