# time period 2

• Mar 3rd 2010, 06:58 AM
diehardmath4
time period 2
The annual \$3600 membership fee at the oak meadows golf club is due at the beginning of the year. Instead of a single "lump" payment, a member can pay \$1600 at the start of the year and defer the \$2000 balance for five months by paying a \$75 surcharge at the time of the second payment. Effectiely, what annual rate of simple interest is oak meadows charging on the \$2000 deferred payment?

P = 3600
r = ?
t = 5/12
I = 2000

did i plug in the correct numbers into the formula ?
• Mar 3rd 2010, 08:32 AM
Wilmer
Quote:

Originally Posted by diehardmath4
The annual \$3600 membership fee at the oak meadows golf club is due at the beginning of the year. Instead of a single "lump" payment, a member can pay \$1600 at the start of the year and defer the \$2000 balance for five months by paying a \$75 surcharge at the time of the second payment. Effectiely, what annual rate of simple interest is oak meadows charging on the \$2000 deferred payment?
P = 3600
r = ?
t = 5/12
I = 2000
did i plug in the correct numbers into the formula ?

No need to worry about the 3600; just concentrate on the 2000.

r = annual rate
2000 * (r/12) * 5 = 75
You can "read" that as: a certain rate r is charged for 5 months
on \$2000, resulting in an interest cost of \$75 ; kapish?

Solve that for r; you should get .09, or 9%.
• Mar 3rd 2010, 08:50 AM
diehardmath4
r = annual rate
2000 * (r/12) * 5 = 75
You can "read" that as: a certain rate r is charged for 5 months
on \$2000, resulting in an interest cost of \$75 ; kapish?

Solve that for r; you should get .09, or 9%.
so if i plug everything into the equaiton it should be

P = 2000
r = ?
t = 5/12
I = 75 ? or 75 = 2000 ( 1 + r/12 * 5 ) ? (Punch)
• Mar 3rd 2010, 10:24 AM
Wilmer
Get away from "that equation" of yours! (Nerd)
What makes you think it'll solve ALL problems?

I gave you the PROPER equation for this problem:
2000 * (r/12) * 5 = 75
Solve THAT equation for r:
10000(r/12) = 75
r/12 = 75/10000
r = 900/10000
r = .09