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# Louie takes out a three-month loan of $1000. The lender  Question banks Downloads My Bookmarks Reviews Important topics Author Message TAGS: CEO Joined: 21 Jan 2007 Posts: 2764 Location: New York City Followers: 9 Kudos [?]: 349 [0], given: 4 Louie takes out a three-month loan of$1000. The lender [#permalink]  18 Dec 2007, 08:18
Louie takes out a three-month loan of $1000. The lender charges him 10% interest per month compunded monthly. The terms of the loan state that Louie must repay the loan in three equal monthly payments. To the nearest dollar, how much does Louie have to pay each month? (A) 333 (B) 383 (C) 402 (D) 433 (E) 483 Senior Manager Joined: 06 Aug 2007 Posts: 370 Followers: 1 Kudos [?]: 23 [0], given: 0 Re: compound interest [#permalink] 18 Dec 2007, 17:41 bmwhype2 wrote: Louie takes out a three-month loan of$1000. The lender charges him
10% interest per month compunded monthly. The terms of the loan state
that Louie must repay the loan in three equal monthly payments. To the
nearest dollar, how much does Louie have to pay each month?

(A) 333
(B) 383
(C) 402
(D) 433
(E) 483

I am getting $443 per month. Manager Joined: 03 Sep 2006 Posts: 233 Followers: 1 Kudos [?]: 5 [0], given: 0 [#permalink] 18 Dec 2007, 18:33 1 month: 1100 2 month: 1210 3 month: 1331 each month: 1331 / 3 ~ 433 Manager Joined: 11 Dec 2007 Posts: 121 Followers: 1 Kudos [?]: 5 [0], given: 0 [#permalink] 19 Dec 2007, 11:41 Isn't it 402 assuming that the payments are made after the loan is taken, while interest is accuing. Month 1: 1100 Minus 1st payment of 402: 698 Month 2: 698*1.1=768 Minus 2nd payment of 402: 365 Month 3: 365*1.1=402 Minus last payment: 0 What is the OA? [#permalink] 19 Dec 2007, 11:41 Similar topics Replies Last post Similar Topics: 1 Taking Out a Larger Loan Amount 5 25 Mar 2014, 12:53 Where should I Go? Take the money or take out loans? 2 07 Feb 2014, 14:30 50 Louie takes out a three-month loan of$1000. The lender 33 22 Sep 2010, 08:39
choosing a lender for stafford & gradplus loans 2 12 Jun 2007, 22:42