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Math Help - Loans

  1. #1
    Newbie
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    Dec 2007
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    Loans

    if anyone can give me a hand I am doing a test review and am stuck on this question.. thanks in advance so much


    Question:
    A $6500 dollar loan at 11.25% compounded monthly is to be repaid by three equal payments due three, six, and twelve months after the date of the loan. Calculate the size of each payment....



    Thanks so much guys i know this is my 1st post..
    thanks...
    -Eric
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  2. #2
    MHF Contributor kalagota's Avatar
    Joined
    Oct 2007
    From
    Taguig City, Philippines
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    Quote Originally Posted by joblo View Post
    if anyone can give me a hand I am doing a test review and am stuck on this question.. thanks in advance so much


    Question:
    A $6500 dollar loan at 11.25% compounded monthly is to be repaid by three equal payments due three, six, and twelve months after the date of the loan. Calculate the size of each payment....



    Thanks so much guys i know this is my 1st post..
    thanks...
    -Eric
    so you would have to pay at equal amounts in different times..

    thus, if X is the amount of payment, then out working equation would be

    i^{(12)} = .1125 \implies i = .009375

    so,

     <br />
6500 = X(1.009375)^{-3} + X(1.009375)^{-6} + X(1.009375)^{-12}
    = X((1.009375)^{-3} + (1.009375)^{-6} + (1.009375)^{-12})<br />

    thus, X = \frac{6500}{(1.009375)^{-3} + (1.009375)^{-6} + (1.009375)^{-12}}

    and X = 2311.5134
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  3. #3
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    thanks a lot, very helpful!!!!
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