Sheryl Tran pays $245 at the end of each month for ten years in order to repay a loan of $22,000. The lender makes level deposits to a sinking fund account that is held by a third party and that pays an annual effective interest rate of 3% during the first four years and a nominal monthly discount rate of 4% there after. Find the difference between the annual effective interest rate charged to Ms. Tran and the lender's annual yield.
Sheryl Tran pays $245 at the end of each month for ten years in order to repay a loan of $22,000. The lender makes level deposits to a sinking fund account that is held by a third party and that pays an annual effective interest rate of 3% during the first four years and a nominal monthly discount rate of 4% there after. Find the difference between the annual effective interest rate charged to Ms. Tran and the lender's annual yield.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 15E
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