Loan Repayments (1 Viewer)

[ANgeLNad]

Hi!
iam just wondering if anyone could help me with the loan repayments..using compound interest to help solve it for yearly and monthly for eg..can u help me in :
An Amount of $3000 is borrowed at 22% p.a and repayments made yearly for 5 years. how much will each repayment be?
plz tell me coz i am stuck with the whole exercise.. plz reply A.S.A.P

 

[BlackJack]

Hmm... I'll give you what I can, I'm not studying much for maths until I've dealt with english..
Let the repayments be R
So, each year you pay R back, after the remaining debt gains interest.
So, at the end of the first year:
Debt(1)= 3000 * 1.22 - R
At the end of the second year:
Debt(2)= Debt(1) *1.22 - R
= (3000 * 1.22 - R) * 1.22 - R
And the 3rd year for the heck of it:
Debt(3) = ((3000 * 1.22 - R) * 1.22 - R) * 1.22 - R
and so on.... notice in the end $3000 is multiplied by 1.22 five times all up and each R is multiplied by 4,3,2,1,0 times by 1.22...
So at the end of 5 years:
0 = 3000 * 1.22^5 - (1.22^4 + 1.22^3 + 1.22^2 + 1.22 + 1 ) * R.
R is roughly $776.47....? Check the numbers, I'm using the wincrap's calculator.

Edit: wait a minute this is obviously WRONG...

 

[BlackJack]

R should be $1047.62 instead. miscalc.