2. You owe your best friend P2,000. Because you are short on cash, you offer to repay the loan over 12 months under the following condition. The first payment will be P100 at the end of month one. The second payment will be 100 + G at the end of month two. At the end of month three, you will repay $100 + 2G. This pattern of increasing G amounts will continue for all remaining months. a. What is the value of G if the interest rate is 0.5% per month? b. What is the equivalent uniform monthly payment? c. Repeat part (a) when the first payment is P150 (i.e., determine G).
2. You owe your best friend P2,000. Because you are short on cash, you offer to repay the loan over 12 months under the following condition. The first payment will be P100 at the end of month one. The second payment will be 100 + G at the end of month two. At the end of month three, you will repay $100 + 2G. This pattern of increasing G amounts will continue for all remaining months. a. What is the value of G if the interest rate is 0.5% per month? b. What is the equivalent uniform monthly payment? c. Repeat part (a) when the first payment is P150 (i.e., determine G).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![2. You owe your best friend $2,000. Because you are short on cash, you offer to repay the loan over
12 months under the following condition. The first payment will be $100 at the end of month one.
The second payment will be $100 + G at the end of month two. At the end of month three, you will
repay P100 + 2G. This pattern of increasing G amounts will continue for all remaining months.
a. What is the value of G if the interest rate is 0.5% per month?
b. What is the equivalent uniform monthly payment?
c. Repeat part (a) when the first payment is P150 (i.e., determine G).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F466d94e1-97df-4a00-95e6-b60e9d836f23%2F736c10c2-328f-4b4b-a59c-9ddd9258284c%2F5d488sj_processed.png&w=3840&q=75)
Transcribed Image Text:2. You owe your best friend $2,000. Because you are short on cash, you offer to repay the loan over
12 months under the following condition. The first payment will be $100 at the end of month one.
The second payment will be $100 + G at the end of month two. At the end of month three, you will
repay P100 + 2G. This pattern of increasing G amounts will continue for all remaining months.
a. What is the value of G if the interest rate is 0.5% per month?
b. What is the equivalent uniform monthly payment?
c. Repeat part (a) when the first payment is P150 (i.e., determine G).
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