A business wants to borrow $300,000 from a bank for a future investment. The bank offers a 5 year loan, compounded quarterly, at 5% interest on the debt. During the period of the bank loan, the company establishes a sinking fund to help discharge the bank loan, at 4%, compounded quarterly, using the future lump sum debt as the lump sum payment in the sinking fund. FIND: the quarterly deposits that the company must deposit into the sinking fund to pay off its bank debt in one lump sum.
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
A business wants to borrow $300,000 from a bank for a future investment. The bank offers a 5 year loan, compounded quarterly, at 5% interest on the debt.
During the period of the bank loan, the company establishes a sinking fund to help discharge the bank loan, at 4%, compounded quarterly, using the future lump sum debt as the lump sum payment in the sinking fund. FIND: the quarterly deposits that the company must deposit into the sinking fund to pay off its bank debt in one lump sum.
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