Calculation Of Sinking Fund For Loan Repayment

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Question

A company can borrow $100,000 at 10% compounded annually for 10 years. To repay the debt at the end of 10 years, a sinking fund is to be setup at 9% compounded annually. Another lender will provide the money at 9/4% compounded annually, to allow the loan to be a mortised by 10 equal annual payments. Which plan would you choose for the company? Show all calculations.

Summary

The question belongs to Mathematics and it is about calculating a plan for a company to choose from for the repayment of loan compounded annually for 10 years.

Total Word Count 59

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