A company borrows $88000 at 10.75% simple interest from State Bank to purchase e

Question

A company borrows $88000 at 10.75% simple interest from State Bank to purchase equipment. State Bank requires the company to make monthly interest-only payments and pay the full $88000 at the end of 8 years. In order to meet the 8 year obligation of $88000,the company makes equal deposits at the end of each month into a sinking fund with Wolf Savings. The sinking fund earns 7% compounded monthly. Note: This problem is set to allow for an answer of a specific tolerance. Be careful in your rounding. You may get some answers correct but not be in the range of answers for the others.

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