A person purchased a new car for $26,200 and financed the entire amount. Suppose that the person can only afford to pay $200 per month. Assume that the payments are made at a continuous annual rate and that interest is compounded continuously at the rate of 8%. (a) Set up a differential equation that is satisfied by the amount f(t) of money owed on the car loan at time t. (b) How long will it take to pay off the car loan?

A person purchased a new car for $26,200 and financed the entire amount. Suppose that the person can only afford to pay $200 per month. Assume that the payments are made at a continuous annual rate and that interest is compounded continuously at the rate of 8%. (a) Set up a differential equation that is satisfied by the amount f(t) of money owed on the car loan at time t. (b) How long will it take to pay off the car loan?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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