Art wants to know how much he'll have to invest today to receive an annuity of $8,000 for three years if interest is earned at 1
2 answers:
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Answer:
100% of the 2nd monthly payment go toward the repayment of principal.
Step-by-step explanation:
The loan taken is the Principal which is mentioned as $72,500 with interest at a nominal rate of 20%. Firstly, it is important to understand that nominal rate means <em>non-compounding </em>rate. Simply put will be a "<em>one-time charged" </em>rate on the loan. Since this is given as 20% of the Principal. It is calculated thus: ×
= $14,500. So the interest on the loan is $14,500. Added to the Principal the total amount to be paid back by the company becomes: $72,500 + $14,500 = $87,000. To pay back this amount at equal end-of-month installments in 1 year (12 months), we divide the total amount by 12. i.e
= $7250. This means, the monthly payment will be $7,250. Since the monthly payment pays only 10% of the initial principal $72,500. By the second month only 20% of the Principal would have been paid. So all of the monthly payment will go towards repaying the principal
Answer:
Initial population of Rabbit = 5 rabbit
After 2 months
Population of Rabbit = 10
After 4 months
population of rabbit = 20
Formula for growth is :
G = , where G is final population and
is initial population, and R is growth rate.
1. 10 = 5 [1 +R]²
Dividing both sides by 5 , we get
2 = (1 + R)²
→ R + 1 = √2 ⇒ taking positive root of 2
→R = √2 -1
Amount of rabbit after 1 year =