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Mathematics, 04.02.2021 16:40 shescarol

. Julie borrows $25,000 at an effective annual interest rate of 12%. She has the following options for repayment: (i) Annual amortization method, with payments made at year-end for 10 years
(ii) Paying annual interest at year-end and building up a sinking fund (earning an effective annual interest rate of 7%), by making level annual payments at year-end, to pay off the loan at the end of 10 years Determine the absolute value of the difference between the total annual outlay under option 1 and the total annual outlay under option 2.

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