document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=746439>Question 746439</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Scott borrowed $255 from a relative for 9 months.  He agreed to pay compound interest at the rate of 4% per month.<BR>\n" );
document.write( "a) How much interest will he pay his relative when he returns the money at the end of the 9 months?  Explain how you solve this problem.<BR>\n" );
document.write( "b) Suppose Scott has to extend the loan to 10 months rather than 9 months.  How much additional interest would he pay for the last month of the loan?  Explain how you solve this problem. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #454278 by </B><A HREF=/tutors/aboutme.mpl?userid=Cromlix><B>Cromlix(4381)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Cromlix><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Cromlix><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=454278\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Compound interest at 4% = 104/100 = 1.04<BR>\n" );
document.write( " $255 x 1.04^9 = $362.95.<BR>\n" );
document.write( "a) $362.95 - $255 = $107.95 (interest at end<BR>\n" );
document.write( "  of 9 months)<BR>\n" );
document.write( "b)$255 x 1.04^10 = $377.46<BR>\n" );
document.write( "  so $377.46 - $362.95 = $14.51 (extra interest<BR>\n" );
document.write( "  by extending loan to 10 months) </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );