Homework Help: Math

Posted by Branson on Monday, May 23, 2011 at 4:06pm.

Henry invests $5,000 in a mutual fund with an annual interest rate of 7.5%. He also has a 4-yr, $10,000 loan at 3.75%. When will the amount of interest earned on the mutual fund be equal to the amount of interest paid on the loan?

Math - Henry, Monday, May 23, 2011 at 8:58pm
Loan: $10,000 @ 3.75% for 4 years.

Pt = (Po*r*t) / (1 - (1+r)^-t.

r = (3.75% / 12)/100% = 0.003125 =
monthly % rate express as a decimal.

t = 4yrs * 12mo/yr = 48mo.

Pt=(10,000*0.003125*48)/(1-(1.003125)^-48.
Pt = 10784.33.

Int. = 10,784.3 - 10000 = 784.33.

Investment: $5,000 @ 7.5%.

Int. = 5000 * 0.075t = 784.33,
375t = $784.33,
t = 2.09yrs = 25mo.

Answer this Question

Related Questions

math 141 - Maria just inherited $10,000. Her bank has a savings account that ...
MATH FOR LIBERAL ARTS - Maria just inherited $10,000. Her bank has a savings ...
Finance - Sauerfood company has decided to buy a new computer system with an ...
calculus - The proprietor of Carson Hardware Store has decided to set up a ...
Math - An executive invests $24,000, some at 7% and some at 5% annual interest. ...
Math - The management of Gibraltar Brokerage Services anticipates a capital ...
Fiancial Management - You decide to purchase a building for $30,000, you put $5,...
Algebra investment - An investor had a total of 25,000 put into a portfolio of ...
algebra - An executive invests $25,000, some at 8% and some at 4% annual ...
college algebra - an executive invests $29,000 some at 7% and some at 6% annual...

For Further Reading

First Name:
School Subject:
Answer: