At the beginning of a month, a customer owes a credit card company $8480. In the middle of the month, the customer repays $A, where A < $8480, and at the end of the month the company adds interest at a rate of 6% of the outstanding debt. This process is repeated with the customer continuing to pay off the same amount, $A, each month. (a) Find the value of A for which the customer still owes $8480 at the start of each month. (b) If A = 1000, calculate the amount owing at the end of the eighth month. (c) Show that the value of A for which the whole amount owing is exactly paid off after the nth payment is given by 8480R-¹(R-1) R" - 1 (d) Find the value of A if the debt is to be paid off exactly after 2 years. A = where R=1.06
At the beginning of a month, a customer owes a credit card company $8480. In the middle of the month, the customer repays $A, where A < $8480, and at the end of the month the company adds interest at a rate of 6% of the outstanding debt. This process is repeated with the customer continuing to pay off the same amount, $A, each month. (a) Find the value of A for which the customer still owes $8480 at the start of each month. (b) If A = 1000, calculate the amount owing at the end of the eighth month. (c) Show that the value of A for which the whole amount owing is exactly paid off after the nth payment is given by 8480R-¹(R-1) R" - 1 (d) Find the value of A if the debt is to be paid off exactly after 2 years. A = where R=1.06
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 11EB: Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from...
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