1. ABC Company borrowed $1,000,000 for five years at a nominal annual rate of 6% compounded monthly. Each month ABC made their interest payment on the loan and deposited an amount D into a sinking fund paying an annual effective rate of 5%. The amount D was exactly enough to accumulate $1,000,000 so that ABC could pay off the loan at the end of five years Find D.
2. Assume that you have borrowed $150,000 from the bank at an annual interest rate of 6.25% for 20 years. What is the dollar amount devoted to principal in the first monthís payment: (a) 315; (b) 279; (c) 382; (d) 1,329. This is compounded monthly