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    Sinking Fund to Repay Loans

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    $6000 is borrowed at 10% compounded semi-annually. The amount is to be paid back in 5 years. If a sinking fund is established to repay the loans and interest in 5 years, and the fund earns 8% compounded quarterly, how much will have to be paid into the fund every 3 months?

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    https://brainmass.com/business/interest-rates/sinking-fund-repay-loans-35811

    Solution Preview

    the present value of the borrowed amount is calculated by:
    FV= ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer how much will have to be paid into the fund every 3 months.

    $2.49

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