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Homework answers / question archive / A $10,000 loan will be repaid at the end of five years by a sinking fund that earns 12% compounded semi-annually
A $10,000 loan will be repaid at the end of five years by a sinking fund that earns 12% compounded semi-annually. The interest rate on the loan is 8% compounded semi-annually.
A) What is the total cost to the debtor at the end of each six months?
B) Find the sinking fund interest income for the 10th period
C) What is the book value of the debt at the end of the 10th period?