Question
A person borrows rm 1000 from a bank at an interest rate of 10%. After some time, he pays the bank rm 1900 as full and final settlement of the loan. Estimate the duration of his loan.
275
likes1375 views
Answer to a math question A person borrows rm 1000 from a bank at an interest rate of 10%. After some time, he pays the bank rm 1900 as full and final settlement of the loan. Estimate the duration of his loan.
Jett
4.794 Answers
Given:
Total amount=A=1900.
Principal amount=P=1000.
annual interest rate=r=0.1%.
Compound interest:
A=P\left(1+\frac{r}{100}\right)^n
Substitute the given values in above formula, we get
1900=1000\left(1+0.1\right)^n
1.1^n=\frac{1900}{1000}
1.1^n=1.9
apply natural logarithm on both sides, we get
\ln\left(1.1^n\right)=\ln\left(1.9\right)
n\cdot\ln\left(1.1\right)=\ln\left(1.9\right)
n=\frac{\ln\left(1.9\right)}{\ln\left(1.1\right)}
n=6.734.
Therefore, The duration of the loan in compounding period is 6.734.
Frequently asked questions (FAQs)
What is the formula to calculate the area of a rectangle, given its length (L) is 5 and width (W) is 8?
+
Find the value of x: sin(2x) + cos(x) = 1
+
Math question: "What is the measure, in degrees, of an isosceles triangle with base angles measuring 40 degrees each?"
+
New questions in Mathematics