Solly will discharge a debt of R500 000 six years from now, using the sinking fund method. The debt’s interest
is 15,6% per year, paid quarterly. The sinking fund will earn interest at a rate of 8,4% per year, compounded
monthly.
The monthly deposit into the sinking fund will equal
[1] R4 236,10.
[2] R5,364,60.
[3] R10 736,10.
[4] R12 958,53.
[5] R16 235,96.
The total yearly cost to discharge the debt (to the nearest rand) will equal
[1] R42 000.
[2] R78 000.
[3] R93 834.
[4] R128 833.
[5] R142 375.