When a loan officer speaks to people about a loan for a certain principal, P, at a certain monthly rate, r, they always have to
1 answer:
Answer:
Step-by-step explanation:
When you take a loan, the amount collected is referred to as the Principal(P).
The loan is given at a certain rate(r) in this case a Monthly Rate for a period of n months. The Monthly payment is denoted using M.
All these variables are related by the function:
Note that if the rate is given as an Annual rate, we divide by 12 to get the monthly rate required.
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Answer:
(a). $20,000
(b). The estimate will be lower than the actual amount.
Step-by-step explanation:
We have been given that Michael saves $423 dollars a month for college.
(a). We know that 1 year equals 12 months.
4 years = 4*12 months = 48 months.
Since we are asked to find the estimated amount of money Michael will save in 4 years, so we will estimate both quantities as:
Therefore, Michael will save approximately $20,000 in 4 years.
(b).
The estimate will be lower than the actual amount as we rounded $423 down $23 to nearest hundred that is $400 and rounded 48 up 2 to nearest ten that is 40.
Therefore, the estimate will be lower than the actual amount.