document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1091846>Question 1091846</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Mary must pay bank the bank $2000 which is due in one year.She then lesson her debt in advance and therefore pays $600 after 3 months and another $800 four months later.If the bank agrees that both payment are subject to the same interest of 14% per annum. How much would she have to pay at the end of the year to settle their outstanding debt? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #706413 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><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=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=706413\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> this depends very much on how the bank handles partial years.\r<BR>\n" );
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document.write( "they could be chargins you interest on the remaining balance at the end of the month (standard practice).\r<BR>\n" );
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document.write( "they could be charging you interest on the average daily balance as they do with credit cards.\r<BR>\n" );
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document.write( "they could be charging you interest compounded annually, monthly (standard practice), or daily.\r<BR>\n" );
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document.write( "you really need to understand the terms of the loan to determine how much it would cost you.\r<BR>\n" );
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document.write( "i'm going to assume they are charging you interest compounded monthly on the remaining balance of the loan.\r<BR>\n" );
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document.write( "that should give you a fair assessment of of what you will owe at the end of the loan period.\r<BR>\n" );
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document.write( "the following spreadsheet shows the calculations.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2017/083001.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "your monthly interest rate is .14/12.\r<BR>\n" );
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document.write( "you start out with 2000 remaining balance.<BR>\n" );
document.write( "at the end of the first month that is multiplied by (1 + .14/12) to get 2023.33...<BR>\n" );
document.write( "at the end of the second month, 2023.33... is multiplied by (1 + .14/12) to get 2046.93.....<BR>\n" );
document.write( "at the end of the third month, 2046.93... is multiplies by (1 + .14/12) to get 2070.81... and then 600 is subtracted from that to get 1470.81...\r<BR>\n" );
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document.write( "this continues until the end of the 12th month.<BR>\n" );
document.write( "the remaining balance at the end of the 12th month is what you still owe.\r<BR>\n" );
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document.write( "the interest calculated at the end of each month is the remaining balance from the previous month * .14/12.\r<BR>\n" );
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document.write( "for example, the interest owed at the end of month 7 is equal to 1522.90... * .14/12 which is equal to 17.76...\r<BR>\n" );
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document.write( "the payment of 800 is made at the end of month 7 after the interest was calculated from the previous month and added to the remaining balance from the previous month.\r<BR>\n" );
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document.write( "the remaining balance at the end of month 7 is therefore calculated as:\r<BR>\n" );
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document.write( "1522.90. * (1 + .14/12) - 800 = 740.66...\r<BR>\n" );
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document.write( " </SPAN>\n" );
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