document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1166131>Question 1166131</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A man takes out a $20 000 bank loan that accrues 8% interest each year. A man decides to pay off only the interest each year, and deposit a different amount X into an interest account that earns him 4% interest each year. <BR>\n" );
document.write( "a) If the man decides to pay off the loan in 10 years how much does he spend on interest alone?<BR>\n" );
document.write( "b) How much should he deposit into the interest account each year so that at the end of 10 years he can pay back the initial $20 000?<BR>\n" );
document.write( "c) How much has the man spent totally? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #790631 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=790631\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the payments on the loan are 2,980.59 at the end of each year for 10 years.\r<BR>\n" );
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document.write( "that makes the total amount he spent on the loan equal to 29,805.9.\r<BR>\n" );
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document.write( "the sum of the interest part of the total payments that he made is equal to 29,805.9 minus 20,000 = 9,805.9.\r<BR>\n" );
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document.write( "the payments on the investment account are 1,665.82 at the end of each year for 10 years.\r<BR>\n" );
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document.write( "that makes the total amount he spent on the investment account equal to 16,658.2.\r<BR>\n" );
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document.write( "his total payments for the 10 years equals 29,805.9 + 16,658.2 = 46,464.1.\r<BR>\n" );
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document.write( "29,805.9 of that is the total payments made to pay off the 20,000 loan at the start of the investment period.\r<BR>\n" );
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document.write( "16,658.2 of that is the total payments made to receive 20,000 at the end of the investment period.\r<BR>\n" );
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document.write( "the total interest that he paid in order to pay off the 20,000 loan at the beginning of the investment period was 29,805.2 minus 20,000 = 9,805.2\r<BR>\n" );
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document.write( "the total interest that he earned by investing to receive 20,000 at the end of the investment period was 20,000 minus 16,658.2 = 3,341.8.\r<BR>\n" );
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document.write( "the answers to your questions are shown below:\r<BR>\n" );
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document.write( "a) If the man decides to pay off the loan in 10 years how much does he spend on interest alone?\r<BR>\n" );
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document.write( "he spent 9,805.2 on interest alone.\r<BR>\n" );
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document.write( "b) How much should he deposit into the interest account each year so that at the end of 10 years he can pay back the initial $20,000?\r<BR>\n" );
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document.write( "he needed to deposit 1,665.82 each year.\r<BR>\n" );
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document.write( "c) How much has the man spent totally?\r<BR>\n" );
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document.write( "the total he spent to satisfy the loan of 20,000 at the beginning of the investment period was 29805.9.<BR>\n" );
document.write( "the total he spent to earn 20,000 at the end of the investment period was  16658.2\r<BR>\n" );
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document.write( "the total he spent was therefore 29,805.9 plus 16,658.2 = 46,464.1\r<BR>\n" );
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document.write( "here's a display of the calculator results for paying off the 20,000 loan at the start of the investment period.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2020/092903.jpg\" >\r<BR>\n" );
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document.write( "here's a display of the calculator results for investing to receive 20,000 at the end of the investment period.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2020/092904.jpg\" >\r<BR>\n" );
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document.write( " </SPAN>\n" );
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