Which plan is cheaper and by how much per annum

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Question 1: A company can borrow $180 000 for 15 years. They can amortize the debt at j1 = 10%, or they can pay interest on the loan at j1 = 9% and set up a sinking fund at j1 = 7% to repay the loan. Which plan is cheaper and by how much per annum?

Reference no: EM132493317

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