math
posted by Annie .
Loan #1
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
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#1  simple interest,
interest earned in 1st year = 39423796 = 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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