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Jim needs $1,000 to buy a new flatscreen TV. Since he has [#permalink]
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09 Sep 2013, 02:29
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Jim needs $1,000 to buy a new flatscreen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A. $357.67 B. $375.85 C. $387.40 D. $399.30 E. $433.33 Any idea how to solve this ? I don't know the answer
Last edited by Bunuel on 09 Sep 2013, 03:11, edited 1 time in total.
Renamed the topic, edited the question and moved to PS forum.



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Re: Jim needs $1,000 to buy a new flatscreen TV. Since he has [#permalink]
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09 Sep 2013, 05:20
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BugDGmat wrote: Jim needs $1,000 to buy a new flatscreen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A. $357.67 B. $375.85 C. $387.40 D. $399.30 E. $433.33 Any idea how to solve this ? I don't know the answer L = 993 r = 0.1 C = 1.1^3 = 1.331 Insert all of these in the formula and we get P = 993*1.331*0.1/0.331 In order to resolve above without a calc, we need to find the approx value of 0.1331/0.331 ~ 0.4~ ~ 993*0.4 ~ 397 Answer D should be the one.
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Re: Jim needs $1,000 to buy a new flatscreen TV. Since he has [#permalink]
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10 Sep 2013, 01:22



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Re: Jim needs $1,000 to buy a new flatscreen TV. Since he has [#permalink]
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07 May 2016, 14:01
BugDGmat wrote: Jim needs $1,000 to buy a new flatscreen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A. $357.67 B. $375.85 C. $387.40 D. $399.30 E. $433.33 Any idea how to solve this ? I don't know the answer EMI can be calculated by the formula EMI = (P* R) /[1  (100/100+R)^n] Where P is principal, R is interest, n is number of installments. In this case, EMI = (993 *10/100)/[1(10000/11000)^3] = (99.30)/[1  (1000/1331)] =99.30/331/1331 = 1331*0.3 = 399.30 Hence answer is D



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Re: Jim needs $1,000 to buy a new flatscreen TV. Since he has [#permalink]
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25 Jun 2017, 09:24
Hi Bunuel pls give in your inputs here, should we take C=(1+r)^2.... or ^3?? Thanks in advance... In the link a similar problem for 3 months, we did not consider the interest for the last month... how about this one... Confused... Pls throw some light...



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Re: Jim needs $1,000 to buy a new flatscreen TV. Since he has [#permalink]
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25 Jun 2017, 09:29
As per Ganesh raja we can use the formula, but why have they given in the question as to what formula to be used to calculate the same? Kindly reply to clarify THanks in advance




Re: Jim needs $1,000 to buy a new flatscreen TV. Since he has
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