Anyone can help with this question? I found out the amount that wouls have to be paid at the 7% interest rate and then subtracted it from the 25000 and worked out the new payment but its not correct(https://i.stack.imgur.com/gb8tJ.jpg)
2026-03-25 19:05:12.1774465512
Mathematics of Finance changing rates and payments
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1
The regular payments from the future value $25000$ of the sinking fund are: $$R\cdot \frac{(1+0.06)^{10}-1}{0.06}=25000 \Rightarrow R=1896.7.$$ After $6$ years the fund will be: $$1896.7\cdot \frac{(1+0.06)^6-1}{0.06}=13230.09.$$ The regular payments for the remaining $4$ years are: $$13230.09\cdot (1+0.07)^4+R\cdot \frac{(1+0.07)^4-1}{0.07}=25000 \Rightarrow R=1724.81.$$