Revision as of 00:50, 19 November 2023 by Admin (Created page with "'''Solution: E''' Let m be the monthly payment and i be the monthly interest rate. The interest in the first payment is 125,000i and the principal repaid is 125,000 – 124,750 = 250. Thus m = 125,000i + 250. Similarly, for the second payment, m = 124,750i +252. Thus, 250i = 2 for i = 2/250 = 0.008 and then m = 1250. To obtain the number of payments, the equation to solve is <math display = "block"> \begin{array}{c}{{125,000=1250a_{\overline{n}|0.008} }}\\ {{100 = \fra...")
Exercise
ABy Admin
Nov 19'23
Answer
Solution: E
Let m be the monthly payment and i be the monthly interest rate. The interest in the first payment is 125,000i and the principal repaid is 125,000 – 124,750 = 250. Thus m = 125,000i + 250. Similarly, for the second payment, m = 124,750i +252. Thus, 250i = 2 for i = 2/250 = 0.008 and then m = 1250. To obtain the number of payments, the equation to solve is
[[math]]
\begin{array}{c}{{125,000=1250a_{\overline{n}|0.008} }}\\
{{100 = \frac{1-1.008^{-n}}{0.008} }}
\\ {{0.2=1.008^{-n}}}\\ {{n=-\ln(0.2)/\ln(1.008)=202}}\end{array}
[[/math]]
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