Need help with financial maths question (1 Viewer)

Drongoski

Well-Known Member
Joined
Feb 22, 2009
Messages
3,933
Gender
Male
HSC
N/A
The formula for monthly repayment, M, that you may not use for the HSC is:



where P = $200000,
n = 20 x 12 = 240 compounding periods and
r = .06/12 = 0.005 = interest rate per compounding period

so that

i.e. $1432.86 per month.

Over the life of the loan, Pedro would have paid: 240 x $1432.86 = $343,886.40

Therefore total interest paid = $343,886.40 - $200,000 = $143,886.40.

In the HSC, you are required to derive the solution, which takes too long to type out.
 
Last edited:

quickoats

Well-Known Member
Joined
Oct 26, 2017
Messages
432
Gender
Undisclosed
HSC
2019
Schools typically teach this in different ways - the present value (PV) method is probably the simplest but idk if it's taught in schools. The above ^^^ is pretty much the PV method.

The way you'd do it is to find the balance as the loan is paid off month by month and sort it out from there.

Screen Shot 2020-09-13 at 10.55.18 pm.png

The total amount paid is 240*M
 
Last edited:

Drongoski

Well-Known Member
Joined
Feb 22, 2009
Messages
3,933
Gender
Male
HSC
N/A
Yes, that's the prescribed approach expected in the HSC.
 
Last edited:
Joined
Mar 30, 2019
Messages
33
Gender
Male
HSC
2020
Schools typically teach this in different ways - the present value (PV) method is probably the simplest but idk if it's taught in schools. The above ^^^ is pretty much the PV method.

The way you'd do it is to find the balance as the loan is paid off month by month and sort it out from there.

View attachment 28836

The total amount paid is 240*M
Schools typically teach this in different ways - the present value (PV) method is probably the simplest but idk if it's taught in schools. The above ^^^ is pretty much the PV method.

The way you'd do it is to find the balance as the loan is paid off month by month and sort it out from there.

View attachment 28836

The total amount paid is 240*M
cheers guys
 

Users Who Are Viewing This Thread (Users: 0, Guests: 1)

Top