Question

Question 7 X Incorrect. A certain college graduate borrows 7780 dollars to buy a car. The lender charges interest at an annual rate of 17%. Assuming that interest is compounded continuously and that the borrower makes payments continuously at a constant annual rate k dollars per year, determine the payment rate that is required to pay off the loan in 2 years. Also determine how much interest is paid during the 2-year period. Round your answers to two decimal places. 2699.24 Payment rate dollars per year -2381.52 Interest paid = dollars

Answer 1

Ans.

Borrower pay loan per annum

Therefore

EMI = principal amount + interest paid on the Car Loan.

EMI = P × r × (1 + r)n/((1 + r)n - 1)

where P= Loan amount, r= interest rate, n=tenure in number of months.

P=$7780

r=17%

n=24

We have to determine payment rate K

In matlab by put this value so we get

Amortized Loan: Paying Back a Fixed Amount Periodically Use this calculator for basic calculations of common loan types such as mortgages, auto loans, student loans, or personal loans, or click the links for more detail on each. Loan Amount $7780 Loan Term 2 years 0 months Interest Rate 17 % Compound Continuously Pay Back Every Year Calculate

Results: Payment Every Year $5,001.82 Total of 2 Payments $10,003.63 Total Interest $2,223.63 View Amortization Table 22% Principal Interest 78% Amortization Schedule х Beginning Balance Interest Principal Ending Balance 1 $7,780.00 $1,441.67 $3,560.14 $4,219.86 $4,219.86 $781.96 $4,219.86 $0.00 2

K=$5001.82

Total interest=$2223.63

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Thank you.