(a) Imani borrows $7,000,000 from the National Housing Trust. Compound interest is charged on the loan...

 

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(a) Imani borrows $7,000,000 from the National Housing Trust. Compound interest is charged on the loan at 12%per annum. She agrees to pay back the loan in 25 equal installments, at yearly intervals, the first repayment being made exactly one year after the loan is taken out. Calculate the value of each installment. (b) At the start of the month, a customer owes a credit card company S1000.00. In the middle of the month, the customer pays SP to the company, where P<1000.00, and at the end of the month, the company adds interest at the rate, R, of 3% of the amount still owing. This process is repeated in each subsequent month. (1) Find the value of P for which the customer owes $1000.00 at the start of every month. Find the value of P for which the whole amount is paid off after the second payment. (ii) Assuming that the debt has not been paid after 4 payments, show that the amount still owing at the beginning of the Sth month can be expressed as (iii) PR(R -1) S 1000R R=1.03 R-1 Show that the value ofP for which the whole amount owing is exactly paid off after the nth pa yment is given by P. (iv) (a) Imani borrows $7,000,000 from the National Housing Trust. Compound interest is charged on the loan at 12%per annum. She agrees to pay back the loan in 25 equal installments, at yearly intervals, the first repayment being made exactly one year after the loan is taken out. Calculate the value of each installment. (b) At the start of the month, a customer owes a credit card company S1000.00. In the middle of the month, the customer pays SP to the company, where P<1000.00, and at the end of the month, the company adds interest at the rate, R, of 3% of the amount still owing. This process is repeated in each subsequent month. (1) Find the value of P for which the customer owes $1000.00 at the start of every month. Find the value of P for which the whole amount is paid off after the second payment. (ii) Assuming that the debt has not been paid after 4 payments, show that the amount still owing at the beginning of the Sth month can be expressed as (iii) PR(R -1) S 1000R R=1.03 R-1 Show that the value ofP for which the whole amount owing is exactly paid off after the nth pa yment is given by P. (iv)

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solution a Given that V 7000000 8 12 n25 tal... View the full answer