Lewis Harvey

2021-08-15

The time taken to settle a debt of $705, repaid in monthly instalments of $25 at the end of each month, with interest rate of 15% compounded monthly.

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Skilled2021-08-16Added 95 answers

Monthly interest rate $=\frac{\text{Annual interest}}{\text{No. of months}}$

$=\frac{15\mathrm{\%}}{12}$

$=1.25\mathrm{\%}$

The no. of months taken to repay the debt may be calculated as follows:

$P=A(\frac{P}{A},1.25\mathrm{\%},n)$

$705=25(\frac{P}{A},1.25\mathrm{\%},n)$

$28.2=(\frac{P}{A},1.25\mathrm{\%},n)$

Looking at the 1.25% interest table we infer that$n=35$ months.

The no. of months taken to repay the debt may be calculated as follows:

Looking at the 1.25% interest table we infer that

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