Nicole borrows $274000 for 10 years at a nominal rate of 7.8% convertible monthly. She has...

Nicole borrows $274000 for 10 years at a nominal rate of 7.8% convertible monthly. She has the option of paying off the loan using either amortization or the sinking fund method. (a) If she chooses to amortize the loan with level monthly payments of $Q, what is the amount of each of her monthly payments? Q = $ 3295.49052

(b) If the sinking fund has an interest rate of 9% convertible monthly, what is the amount of her monthly outlay if she chooses this method? (Assume monthly payments and deposits.) Outlay = $ 3196.477325442964

(c) How much will she save each month by going with the better method? Answer = 99.013195 dollars. (#c is incorrected)

Expert Solution

ekkarill92 answered 1 year ago

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