masu
March 29th 2006, 12:40 PM
Thanks for ctperng's response first.
My question is in pg.184 example 6.8 (from "The theory of interest")
(I will attach the question in the end)
the solusion said that D*S_8/S_2=2000
I would like to know why?
I know it is true, actually,
1+(1+i)^2+(1+i)^4+(1+i)^6=[(1+i)^8-1]/[(1+i)^2-1]=S_8/S_2
What I want to know is how to get the answer S_8/S_2 directly?
I mean how to interpret it verbally.
Thanks a lot^^
Ex 6.8
A borrower takes out a loan of $2000 for two years. Construct a sinking fund schedule if the lender receives 10% effective on the loan and if the borrower replaces the amount of the loan with semiannual deposits in a sinking fund earning 8% convertible quartly.
My question is in pg.184 example 6.8 (from "The theory of interest")
(I will attach the question in the end)
the solusion said that D*S_8/S_2=2000
I would like to know why?
I know it is true, actually,
1+(1+i)^2+(1+i)^4+(1+i)^6=[(1+i)^8-1]/[(1+i)^2-1]=S_8/S_2
What I want to know is how to get the answer S_8/S_2 directly?
I mean how to interpret it verbally.
Thanks a lot^^
Ex 6.8
A borrower takes out a loan of $2000 for two years. Construct a sinking fund schedule if the lender receives 10% effective on the loan and if the borrower replaces the amount of the loan with semiannual deposits in a sinking fund earning 8% convertible quartly.