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Math Help - Interest calculation

  1. #1
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    Interest calculation

    The twins ada and bos grandmother gave them a 18 year gift that she will pay 5000euros every birthday from their 18th to 25 birthday. The bank gave an annual intrest of 4%

    a) how much money does ada have on her account on her 26th birthday? Bo said to his grandma he does want the money all at one time on his 18th birthday because he wanted to buy a car. How much does grandma have to pay him if she agreed on it so that his gift should have the same walue as adas?

    b) Grandma didnt agree on bos request he went to the bank and took a loan of 30 000 euros. he got the loan at 5,4% intrestrate and on 10 years. The bank wants him to pay equal rates at a time once in a month How much does he have to pay every mont?

    c)Because hed get 5000euros from his grandma every year he wanted to pay more than the bank suggested (5b). He decided to pay 400 euros every month. How long did it take to pay the loan?



    Please whole calculations and answers thnx again guys.
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  2. #2
    GAMMA Mathematics
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    Quote Originally Posted by Rambo View Post
    The twins ada and bos grandmother gave them a 18 year gift that she will pay 5000euros every birthday from their 18th to 25 birthday. The bank gave an annual intrest of 4%

    a) how much money does ada have on her account on her 26th birthday? Bo said to his grandma he does want the money all at one time on his 18th birthday because he wanted to buy a car. How much does grandma have to pay him if she agreed on it so that his gift should have the same walue as adas?
    A = 5000 \sum _{k=1} ^{8} 1.04^k

    That's the total at the 26th birthday, discount it back for the total at the 18th birthday...

    B = \frac{A}{1.04^8}
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  3. #3
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    thnx

    im no mathematic genious thats why i would want all my maths here calculated so i know how to use the formulas. I have test on friday so please show all calculations not only formulas
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  4. #4
    GAMMA Mathematics
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    Quote Originally Posted by Rambo View Post
    im no mathematic genious thats why i would want all my maths here calculated so i know how to use the formulas. I have test on friday so please show all calculations not only formulas
    That sum comes from each payment being brought forward with interest x amount of years...

    A = 5000(1.04)^8 + 5000(1.04)^7 +5000(1.04)^6 +5000(1.04)^5  +5000(1.04)^4 +5000(1.04)^3 +5000(1.04)^2 +5000(1.04)^1
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