Posted by Will on Thursday, November 8, 2012 at 4:04pm.
let the monthly interest rate be i
232( 1 - (1+i)^-12)/i = 2600
(1 - (1+i)^-12 )/i = 11.2069
1 - (1+i)^-12 = 11.2069 i
1 - (1+i)^-12 - 11.2069 i = 0
This equation cannot be solved by the usual standard methods.
we can try some values of i
let i = .01
LS = .0004818 , RS = 0 , not a bad guess
let i = .011
LS = -.000249 , hey that's even closer, but now it is negative,
So i must be between .01 and .011
do you get the idea?
correct to 5 decimals I got i = .01068
so the monthly charge on $100 is $1.068
Unusual way to state the question, usually it would be stated as an annual interest rate with the stated compound interest period
e.g. in this case:
.01068(12) or 12.816 % interest per annum compounded monthly.
Related Questions
math for business and finance - dick hercher borrowed $7,000 to travel to london...
Math - 4. Vanna has just financed the purchase of a home for $200 000. She ...
Business Math - Terry has an 18-month installment loan for $1,700 at 12% annual ...
Business Math Question - Find the finance charge per $100 on a loan of $12,600 ...
business math - financing furniture that costs $4200.00 with a two year ...
Algebra 1 - A finance company offers cheaper interest rates if you borrow a ...
Finance - A guy borrows $5000 and wants to repay it $190 per month starting at ...
business math - Dick Hercher borrowed $7,000 to travel to London. His loan is to...
finance - A firm has decided to borrow $500,000 on a 10% add-on basis, payable ...
Math - please help me thanks :) Paul needs to repay a loan(installment loan) of...
For Further Reading
