Answer:
Step-by-step explanation:
Given
--- time (years)
--- amount
--- rate of interest
Required
The last 10 payments (x)
First, calculate the end of year 1 payment
Amount at end of year 1
Rewrite as:
Next, calculate the end of year 1 payment
Amount at end of year 2
Rewrite as:
We have been able to create a pattern:
So, the payment till the end of the 10th year is:
To calculate X (the last 10 payments), we make use of the following geometric series:
The amount to be paid is:
--- i.e. amount at the end of the 10th year * rate of 10 years
So, we have:
The geometric sum can be rewritten using the following formula:
In this case:
So, we have:
So, the equation becomes:
Solve for x
Approximate