can someone show me the method of solving for periodic payments using a sinking fund.?

Question

urgent (with answer) please heeeeeeeeeeelp!!!!

Answer 1

Lets say that you have a loan of $1,000 @ 6% interest with a monthly payment (.5% per month). You'd pay $5 per month in interest.

The loan is due in 5 years. A sinking fund could be set up where you put aside $200 per year. That way, you would have the $1000 to pay off the loan at the end of the 5 years.