Question
Asked Nov 14, 2019
104 views
fullscreen
check_circle

Expert Answer

Step 1

It is given that, L dollars are borrowed for N years at interest rate r per annum and monthly payment (P) is calculated using the equation

1-b-12
L P
where b 1
12
--(1)
b-1
help_outline

Image Transcriptionclose

1-b-12 L P where b 1 12 --(1) b-1

fullscreen
Step 2

To find:

  • The value of payment (P), if L=7300, n=4 and r=7%.
  • If loan L=$7300 is paid back over four years with annual payment P=$200, then apply Newton’s Method to compute the implied interest rate r of this loan.
Step 3
  • From (1), the value of payment P can be evaluated by substitut...
|-12( 4)
Plugging, L 7300,
7
1+
12
r
r = 7%
12
7300 P
b 1
고기
7
1+
-1
12
and N 4
-48
7
1+
12
7300 P
7
12
7
19
(7300)
12
12
help_outline

Image Transcriptionclose

|-12( 4) Plugging, L 7300, 7 1+ 12 r r = 7% 12 7300 P b 1 고기 7 1+ -1 12 and N 4 -48 7 1+ 12 7300 P 7 12 7 19 (7300) 12 12

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Math

Calculus