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ing pay which the customer still owes $8 t

ing pay which the customer still owes $8 t

Intermediate Algebra
Intermediate Algebra
10th Edition
ISBN:9781285195728
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter11: Exponential And Logarithmic Functions
Section11.2: Applications Of Exponential Functions
Problem 27PS
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8. At the beginning of a month, a customer owes a credit card company $8480. In the middle of the month, the customer repays $A, where A < $8480, and at the end of the month the company adds interest at a rate of 6% of the outstanding debt. This process is repeated with the customer continuing to pay off the same amount, $A, each month. (a) Find the value of A for which the customer still owes $8480 at the start of each month. (b) If A = 1000, calculate the amount owing at the end of the eighth month. (c) Show that the value of A for which the whole amount owing is exactly paid off after the nth payment is given by 8480R"(R – 1) A = where R = 1.06 R" – 1 (d) Find the value of A if the debt is to be paid off exactly after two years.
Transcribed Image Text:8. At the beginning of a month, a customer owes a credit card company $8480. In the middle of the month, the customer repays $A, where A < $8480, and at the end of the month the company adds interest at a rate of 6% of the outstanding debt. This process is repeated with the customer continuing to pay off the same amount, $A, each month. (a) Find the value of A for which the customer still owes $8480 at the start of each month. (b) If A = 1000, calculate the amount owing at the end of the eighth month. (c) Show that the value of A for which the whole amount owing is exactly paid off after the nth payment is given by 8480R"(R – 1) A = where R = 1.06 R" – 1 (d) Find the value of A if the debt is to be paid off exactly after two years.
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