# annuities of the ends of periods

• Nov 22nd 2009, 02:43 PM
hebby
annuities of the ends of periods
We pay back a loan of 50000 USD by annuities of 10000 USD at a rate of 17%.

a) How many complete annuities will be becessary?

b) What is the amount that will have to accompany the last complete payment?

c)What is the amount of paid interest during the 4th year?

d) How much capital will the 5th payment require?
• Nov 22nd 2009, 05:46 PM
TKHunny
Quote:

Originally Posted by hebby
We pay back a loan of 50000 USD by annuities of 10000 USD at a rate of 17%.

a) How many complete annuities will be becessary?

b) What is the amount that will have to accompany the last complete payment?

c)What is the amount of paid interest during the 4th year?

d) How much capital will the 5th payment require?

Basic Principles. Trust me on this.

$v = 1/1.17$

$50000 = 10000*(v + v^2 + ... + v^n)$

1) Add up the geometric series in the parentheses.
2) Solve for n

You tell me what to do next. 'n' will NOT be an integer.

Note: If you use a calculator's financial function to calculate 'n', you may get an integer value that will NOT be what you want.
• Nov 22nd 2009, 06:19 PM
hebby
I get 12 complete annuities
• Nov 22nd 2009, 07:03 PM
Wilmer
WHY are you using the term "annuity"?
Why are you not simply saying: annual payment of \$10,000 ?
• Nov 22nd 2009, 07:14 PM
hebby
im taking the course in french....but yes that sounds better+
• Nov 23rd 2009, 03:08 PM
TKHunny
Quote:

Originally Posted by hebby
I get 12 complete annuities

You didn't do as I directed.

1) 12 is an integer. This is very unlikely to be a sufficient response.
2) You don't seem to have a plan what to do next.

3) Please tell us what langauge you are using from the beginning? Guessing why words are weird is a tough business.