A borrows $12,000 for 10 years and agree to make semiannual payments of $1,000. The lender receives 12% convertible semiannually on the investment each year for the first 5 years and 10% convertible...

Extracted text: A borrows $12,000 for 10 years and agree to make semiannual payments of $1,000. The lender receives 12% convertible semiannually on the investment each year for the first 5 years and 10% convertible semiannually on the investment each year for the second 5 years. The balance of each payment is invested in a sinking fund earning 8% convertible semiannually. Find the amount by which the sinking fund is short of repaying the loan at the end of the 10 years.