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March 28, 2017

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Nazir saved $900 to buy a plasma tv, he borrowed the rest at an interest rate of 18%/a compounded monthy, 2 years later he paid $ 1420.50 for the principal and the interest, how much did the tv originally cost

  • math - ,

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

    r = (18%/12) / 100% = 0.015 = Monthly % rate expressed as a decimal.

    t = 12 mo/yr * 2yrs = 24 Months.

    Pt=(Po*0.015*24)/(1-(1.015)^-24)= 1420.50.
    (Po*0.36)/0.30045608 = 1420.50,
    1.198178447*Po = 1420.50,
    Po = $1185.55 = Amt. of loan.

    C = 900 + 1185.55 = $2085.55 = Cost of
    TV.

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