### Procedure of loan amortization also capital recovery

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1) Sam wishes to retire in thirty years, also he wishes to have the annuity of \$1,000 a year for twenty years after retirement. Sam wishes to get the first annuity payment at the ending of 30th year. By using the interest rate of 10%, how much must Sam invest today to have his retirement?

2) Company has issued debentures of Rs. 50 Lakhs to be repaid after 7 years. How much must the company invest in the sinking fund earning 12% to be able to repay debentures? Illustrate procedure of loan amortization also capital recovery through suitable example.

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