Payments question (1 Viewer)

BlueGas · Oct 3, 2015

I need to know how to do the first two parts of the question, I don't understand them.

keepLooking · Oct 3, 2015

$\\P = 200000, r = 1.0075 ($Compounded Monthly hence $\frac{0.09}{12}) \\\\ $It is given that $A_{n} $ represents the amount owing after $ n^{th} $ half-yearly instalments.$\\$As interest is compounded monthly, you know that the interest would have been added for 6 times until the first instalment. (I may be wrong here.) $\\A_{1} = Pr^6 - M\\$Because you need to find the expression for the month after her repayment, interest would have been compounded.$\\O=Pr^7 - Mr$

$\\\\$You know that her last repayment is 2020 whilst her first is 2010, there are 10 years and it is half-yearly instalments so she makes 20 payments?$$

I may be wrong, please correct me if so!

BlueGas · Oct 3, 2015

Here's the answer but I don't know the process.

si2136 · Oct 3, 2015

(i) A = $200,000(1+0.0075)^6 - M [P = $200,000 , R = 1.0075 (The 0.0075 is from 0.09/12) N = 6 (Compounded Monthly)] The M is there because A is the amount owing.
(ii) 22 Repayments. @KeepLooking didn't count it inclusively.
(iii)M = $200,000(1+0.0075) = $201,500

BlueGas · Oct 3, 2015

si2136 said:
(i) A = $200,000(1+0.0075)^6 - M [P = $200,000 , R = 1.0075 (The 0.0075 is from 0.09/12) N = 6 (Compounded Monthly)] The M is there because A is the amount owing.
(ii) 22 Repayments. @KeepLooking didn't count it inclusively.
(iii)M = $200,000(1+0.0075) = $201,500

But why are the answers like that? I want to know the process.

For example if it was compounded quarterly, would n = 3?

keepLooking · Oct 3, 2015

BlueGas said:
For example if it was compounded quarterly, would n = 3?

Yeah.

BlueGas · Oct 3, 2015

si2136 said:
(i) A = $200,000(1+0.0075)^6 - M [P = $200,000 , R = 1.0075 (The 0.0075 is from 0.09/12) N = 6 (Compounded Monthly)] The M is there because A is the amount owing.
(ii) 22 Repayments. @KeepLooking didn't count it inclusively.
(iii)M = $200,000(1+0.0075) = $201,500

How are the amount of repayments calculated?

Payments question (1 Viewer)

BlueGas

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keepLooking

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BlueGas

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si2136

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BlueGas

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keepLooking

Active Member

BlueGas

Well-Known Member

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