Loan makes interest payments at the end of each six months

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Reference no: EM131955761

The borrower is in a $238,000 loan makes interest payments at the end of each six months for eight years. These are computed using an annual effective discount rate of 6.5%. Each time he makes an interest payment, the borrower also makes a deposit into a sinking fund earning a nominal interest rate of 4.2% convertible monthly. The amount of each sinking und deposit is D in the first three years and 2D in the remaning five years, and the sinking fund balance at the end of the eight years is equal to the loan amount. Find D.

Reference no: EM131955761

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