A $4000 loan was originally made at 9% simple interest for 5 years. At the end of this period the loan was extended for 4 years, without the interest being paid, but the new interest rate was made 10% compounded semi-annually. How much should the borrower pay at the end of 8years
PROBLEM SOLVING:Solve the following problems. Show detailed, complete and neat illustrations or solutions. Round off answers in fourdecimal places.
1.A $4000 loan was originally made at 9% simple interest for 5 years. At the end of this period the loan was extended for 4 years, without the interest being paid, but the new interest rate was made 10% compounded semi-annually. How much should the borrower pay at the end of 8years.
2.A person who is now 35 years old is planning for his retired life. He plans to invest an equal sum of $ 10,000 at the end of every year for the next 25 years starting from the end of the next year. The bank gives 20% interest rate, compounded annually. Find the maturity value of his account when he is 60 years old.
3.A company has to replace a present facility after 15 years at an outlay of $ 500,000. It plans to deposit an equal amount at the end of every year for the next 15 years at an interest rate of18% compounded annually. Find the equivalent amount that must be deposited at the end of every year for the next 15 years.
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