A bank offers a loan to each of two borrowers with different credit scores. Both loans are for the
same amount.
The first borrower is charged a monthly effective interest rate of 1% and makes level end-of-
month payments of X for n months to pay off the loan.
The second borrower is charged a monthly effective interest rate of 2.01% and makes level end-
of-month payments of 2.01X for 200 months to pay off the loan.
Calculate n.
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.