A person has a 10-year contract to receive a base salary of $25,000 a year and an increase of 5% every year starting from the second year. The person purchases a luxury item now for $43,000. The interest rate is 4% per year and the person would like to arrange a 10-year loan such that an equal (maximal) amount of money will be available for consumption in each of the next 10 years. Calculate the amount to be borrowed and the amount paid back each year.
A person has a 10-year contract to receive a base salary of $25,000 a year and an increase of 5% every year starting from the second year. The person purchases a luxury item now for $43,000. The interest rate is 4% per year and the person would like to arrange a 10-year loan such that an equal (maximal) amount of money will be available for consumption in each of the next 10 years. Calculate the amount to be borrowed and the amount paid back each year.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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