The principal is $1,00,000 and the loan adds 5% interest of the debt and rounds it to nearest 1,000 above month by month.Calculate the amount of debt in 7 months.
Ans of question=$144000.How?
let's create a formula
1,000,000 = x
x = 5%(x) = new x
etc etc
so you would do this 7 times
If I read the question correctly, the rate is 5% per month!!!
because of the rounding to the nearest $1000 above, we cannot use our nice standard formula.
so we have to do this month by month.
btw, using your comma divider , $1,00,000 makes no sense, I will read it as $100,000 based
on their answer
after month 1: 100,000(1.05) = 105,000
after month 2: 105,000(1.05) = 110,250 ----> 111,000
after month 3: 111,000(1.05) = 116,550 -----> 117,000
after month 4: 117,000(1.05) = 122,850 -----> 123,000
after month 5: 123,000(1.05) = 129,150-----> 130,000
after month 6: 130,000(1.05) = 136,500 -----> 137,000
after month 7: 137,000(1.05) = 143,850 ----> 144,000 !!!!!
What an absurd and ridiculous question !!!
Other than some criminal money laundering scheme or loan shark business,
who would have a contract like that?
I also don't know!
To calculate the amount of debt after 7 months with a principal of $100,000 and 5% interest added monthly, we can use the following steps:
Step 1: Find the interest added each month:
Interest = Principal * Interest Rate
Interest = $100,000 * 5% = $5,000
Step 2: Round the interest to the nearest $1,000 (above):
Rounded Interest = Round Up (Interest / $1,000) * $1,000
Rounded Interest = Round Up ($5,000 / $1,000) * $1,000
Rounded Interest = $6,000
Step 3: Calculate the new debt after the interest is added for each month:
Month 1: Debt = Principal + Rounded Interest
Month 1: Debt = $100,000 + $6,000 = $106,000
Month 2: Debt = Month 1 Debt + Rounded Interest
Month 2: Debt = $106,000 + $6,000 = $112,000
Month 3: Debt = Month 2 Debt + Rounded Interest
Month 3: Debt = $112,000 + $6,000 = $118,000
Month 4: Debt = Month 3 Debt + Rounded Interest
Month 4: Debt = $118,000 + $6,000 = $124,000
Month 5: Debt = Month 4 Debt + Rounded Interest
Month 5: Debt = $124,000 + $6,000 = $130,000
Month 6: Debt = Month 5 Debt + Rounded Interest
Month 6: Debt = $130,000 + $6,000 = $136,000
Month 7: Debt = Month 6 Debt + Rounded Interest
Month 7: Debt = $136,000 + $6,000 = $142,000
The calculated debt after 7 months is $142,000, which is not equal to the given answer ($144,000). Please double-check the information or calculations provided to verify the correct answer.