Question

When josh borrowed money, he originally agreed to repay the loan by making three equal payments of $1500, with a payment due now, another payment due two years from now, and the final payment due four years from now. Instead of the original payments, he plans to pay off the loan by making a single payment of 5010. If interest is 10%, compounded annually, when will he make the single payment?

Answer 1

Answer:

5 years

Step-by-step explanation:

Principal Amount to be paid=$4500

Interest rate = 2%

Number if Times compounded= number of years

Number of years = x

Among total= $5010

A= p(1+r/n)^(nt)

But n= t =x

A= p(1+r/x)^(x²)

5010=4500(1+0.02/x)^(x²)

5010/4500 = (1+0.02/x)^(x²)

1.11333=( 1+0.02/x)^(x²)

Using trial and error method the number of years maximum to give approximately $5010 is 5 years