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August 21, 2014

August 21, 2014

Posted by **Annie** on Thursday, January 19, 2012 at 10:06pm.

Year Amount owed

1 $3796

2 $3942

3 $4088

Loan # 2

Year Amount owed

1 $977.53

2 $1036.18

3 1098.35

For loan #1 is simple interest. Loan #2 is compound interest

How much was each loan originally

Determine the future value of each loan after 10 years

No one has answered this question yet

- math -
**Reiny**, Thursday, January 19, 2012 at 11:41pm#1 - simple interest,

interest earned in 1st year = 3942-3796 = 146

rate = 146/3796 = .0385 or 3.85%

check : is 2(146) + 3796 = 4088 ? , YES!

#2, let the rate be i

for 1st year ...

977.53(1+i) = 1036.18

1+i = 1.059998

i = .059998 or .06 = 6%

check: is 977.53(1.059998)^2 = 1098.35 ? YES!

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