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Math Help - loan repayment problem! FM

  1. #1
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    loan repayment problem! FM

    Snoopy borrows 7400 dollars to pay for his new super-deluxe doghouse. To pay off the loan, he agrees to make monthly interest payments on the loan, and will also build up a sinking fund with equal monthly deposits to repay the principal with a single payment 28 months from now. If the interest rate on the loan is 7.9 percent, and the interest paid on the sinking fund is 6.9 percent, both nominal convertible monthly, what is Snoopy's total outlay? (Assume the first interest payment and the first sinking fund deposit will both come in one month.)
    Answer = dollars. the answer in the box is what i got and it s wrong!


    i found the monthly rate and found the value of the monthly payment in the sinking fund then i found the constant interest he pays 28 times... added them up and substract 7400.

    not subtracting the 7400 is also a bad answer

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  2. #2
    MHF Contributor
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    Re: loan repayment problem! FM

    Interest payments = 48.71666... ; total paid = 28 * 48.71666... = 1364.08666...

    Fund payments = 244.33881...; total paid = 28 * 244.33881... = 6841.48666...

    Snoopy's total outlay = 1364.08666 + 6841.48666 = 8205.57332...
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