Question

RM60,000 is borrowed for 12 years at 5% compounded annually. The borrower does not pay interest currently and will pay all accrued interest at the end of 12 years together with the principal.

(a) Find the amount annual sinking fund deposit necessary to liquidate the loan at the end of 12 years if the sinking fund earns 3% yearly compounding and the borrower make first payment immediately.

(b) Prepared a sinking fund schedule.

Ans: (a) RM 7,371.25

(PLS DUN ANSWER IN EXCEL FORMAT) (pls STATE THE FORMULA USED IN DETAIL)

Answer 1

Answer of 1 :

p = r/m
------------------ x A
(1 + r/m)n*m -1

Answer of 2 :

	Compound interest(%)	Ammount of compund interest	Formula
Answer Of 2:
60,000	5%	3000	A3+B3
2nd year
63,000	5%	3150
3rd year
66,150	5%	3307.5	a5+c5 , a7*b7
4th year
69,458	5%	3472.875	a7+c7 , a9*b9
5th year
72,930	5%	3646.51875
6th year
76,577	5%	3828.844688
7th year
80,406	5%	4020.286922
8th year
84,426	5%	4221.301268
9th year
84,426	5%	4221.303768
10th year
88,647	5%	4432.368956
11th year
93,080	5%	4653.987404
12th year
97,734	5%	4886.686774
After 12th year
102,620