ACTSC 231 SF-example_soln

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

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

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

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