Now I understand this is pretty easy, and I thought I had it figured out yet my the answers our teacher provided doesn't really fit what i'm getting.
The problem is:
You get a student loan of 25,000 for 4 years totaling $100,000 in the end.
You have two payment plans. Both with 7% (.07) interest.
A: Pay 20,000 a year for 10 years.
B: Pay 30,000 a year for 5 years.
Now after creating two summations for these problems:
For R our teacher wanted us to use R = 1/1+P = 1/1+.07 = 1/1.07
(I'm not sure how to make the symbols so i'll try my best to type this)
A. y = 0 to 9, 20,000 * (1/1.07) ^ y which equals out to about 150306
B. y = 0 to 4, 30,000 * (1/1.07) ^ y which equals out to about 131616
Sounds easy enough, yet my teacher says that the totals for both equations is A = 114,660.69 and B = 93,840.63 and i'm not sure how exactly he got this, i've tried over and over calculating these and I've yet to get the answers he got. Can anyone think of anything?
Also he wants us to calculate the commission that the loan officer got from the loans. He worded that section like this:
Loan officer’s profit
You need to know how much money you got to start with
Same equations as above; here 2500. What is the summation limit? ( you are getting the money at the beginning of the college year) is it 0 to 3 or 0 to 4?
Doesn't really explain much for what we're supposed to be looking for....