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A loan of $3,200 is obtained at 8.4% payable monthly and is due in six years....

A loan of $3,200 is obtained at 8.4% payable monthly and is due in six years. To accumulate the principal the borrower will make monthly deposits into a sinking fund which earns 7.2% interest compounded monthly. Determine the total periodic payment. IF the debt had been amortized with payments equal in size to the total periodic payment, what would be the effective interest rate to the nears 0.01%?

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Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 1 month ago
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