soln-example-ch3_eg3.1-eg3.8_

# soln-example-ch3_eg3.1-eg3.8_ - O E xample.1 A l oan o f \$...

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O Example 3.1: A loan of \$ 10,000 is repaid by monthly payments of \$600 over 2 years, payable in advance. i) What is the annual effective rate on the transaction? ii) Does it exceed 35%? Cil^: i) LeA j dtuttt if-t ,**+qJ lcraor; :Soo (t+ Vi +4r+ (nl c,|. .,1r,.( \ :> J=|+72 .: v/j tt) =f,or,. hrj'u ry ;;) { " =?rF,. 'l : U,E\f,,-I =J, T7 >f Z ?'V =6oo t^ (o,f Vl1'.].1?r - ,o e/ t N \ ) '7W, ^ ;L'ew d kt tl't- >^Aeler r-V^ 'i.E'., IcZT (c 'i >l- v^ =2 b;fiet \ +F" - r^bi ru =t[Jir,uffir,u o *, ft,1il= (r, +f q ( r ( \ s'; 26 .) = ]4, ieVe , tAt 't Yi :o,f rr,,1 6 3,{f > /+ d\r-o :2 1 Example 3-2 o Examp|e 3.2: You borrow \$10,000 and agree to repay \$,000 at the end- of each year for ?? years and an extra contribution of \$X(< 1000) at the end of n years' Find n,, if the effective rate of interest rs 4Ta Pef Vefr rr+f f;1r', l.- drs!t' eAS > 10, g "j t - 4S wl i"ullh Q s--'i . lo/o'! I VL= i-itt V. /t .t.-f b

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Example 3.3 Example 3.3: Finn wants to buy a ear. He can afford repayments of \$600 per month. The loan compony advertises a rate of interest of 6% per year on a 3-year loan or 4.8% per year on a 5-year
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soln-example-ch3_eg3.1-eg3.8_ - O E xample.1 A l oan o f \$...

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