ACTSC 231 SF-example_soln

# ACTSC 231 SF-example_soln - – p. 5/ 9 Example SF-2 •...

This preview shows pages 1–2. Sign up to view the full content.

Example SF-1 Example SF-1: A loan of \$10,000 is repaid in 8 years by the sinking fund method. The interest rate on the loan is 10% per year effective. The sinking fund earns interest at a rate of 6% per year effective. What is the total annual payment? Assume both the interest payment and sinking fund payment are annually-based, payable in arrear. C. Weng ([email protected])

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: – p. 5/ 9 Example SF-2 • The city of Waterloo borrows \$1,000,000 to build a rink. They pay interest at i (2) = 6% . The debt will be redeemed for \$1,000,000 in 10 years. What semi-annual sinking fund deposit will accumulate \$1,000,000 in 10 years at i (2) = 6% ? Find the total semi-annual cost to the city. C. Weng ([email protected]) – p. 7/ 9...
View Full Document

## This note was uploaded on 01/21/2011 for the course ACTSC 231 taught by Professor Chisholm during the Fall '09 term at Waterloo.

### Page1 / 2

ACTSC 231 SF-example_soln - – p. 5/ 9 Example SF-2 •...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online