shaselai wrote:
sachinrelan 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
Couldn't solve by a systematic approach.
ok, there is an interest formula that i forget but lets do it another way:
so basically he is getting 10% interest per month for TWO month since he pays off in 3 months.
so 1000*1.1*1.1 = 1210
now divide by 3 = ~403.333
C
hi
yes, it may seem very obvious naturally ....
but can you show it on paper ...?
For example, say, Mr X provides a loan amounting $100 to Mr Y in January at 10% interest compounded per month. At the end of January, the amount will turn out to be $110, at the end of February, the amount will be $121, and finally, at the end of March, the amount will be $133...
here you can see....133 = 100 x 1.1 x 1.1 x 1.1...
thus, the multiplier (1.1) is multiplied three times ......
so, how can you multiply $1000 with (1.1) only two times.....? it may seem very obvious, but I am in trouble ....
anybody out there to help me understand this picture, please ....