Loan repayments! (1 Viewer)

[atakach99]

A loan of $6000 over 5 years at 15% p.a. interest, charged monthly, is paid back in 5 yearly installments. How much is each installment, and how much money is paid altogether.

Answer: $1835.68; $9178.40

 

[charlesdinio]

are you asking how?

 

[atakach99]

lol yea can u plz do it

 

[Timothy.Siu]

sure, let P=$6000 and R=1+15/1200 Q= yearly repayment
1st year: PR^12-Q
2nd year: PR^24-QR^12-Q
....
5th yearR^60-QR^48-.....-Q
=PR^60-Q(R^60-1)
.................R^12-1

Q=[PR^60(R^12-1)]/(R^60-1)
=1835.68

5x1835.68=9178.40

 

[atakach99]

umm i didnt really understand ur method...can u jsut tell me what values to use and i'll substitute them into my working

 

[Timothy.Siu]

umm i didnt really understand ur method...can u jsut tell me what values to use and i'll substitute them into my working

lol....damn sorry for crap working out
umm basically the common difference is the monthly interest to the power of 12 instead of the yearly interest

soo, in ur geometric series the common difference is R^12 where r is the monthly interest