Concept explainers
A bad loan Consider a loan repayment plan described by the initial value problem
where the amount borrowed is B(0) = $40,000, the monthly payments are $600, and B(t) is the unpaid balance in the loan.
a. Find the solution of the initial value problem and explain why B is an increasing function.
b. What is the most that you can borrow under the terms of this loan without going further into debt each month?
c. Now consider the more general loan repayment plan described by the initial value problem
where r > 0 reflects the interest rate, m > 0 is the monthly payment, and B0 > 0 is the amount borrowed. In terms of m and r, what is the maximum amount B0 that can be borrowed without going further into debt each month?
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Chapter D1 Solutions
CODE/CALC ET 3-HOLE
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