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Problem:

A borrower is repaying a loan with 10 annual installments of $2000. Half of the loan is repaid by the amortization method at an effective rate of i=0.06. The other half of the loan is repaid by the sinking fun method in which the lender receives i=0.06 and the sinking fun accumulates at i=0.05.

Required:

Question: Find the amount of the loan to the nearest dollar.

Note: Provide support for your rationale.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162714

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