Question 1193464: Sonya borrowed a sum of money and promised to pay 60,000 at the
end of one year and 4 months. If interest is charged at 9%
compounded quarterly, what was the original sum borrowed?
Answer by ikleyn(52772)   (Show Source):
You can put this solution on YOUR website! .
In my view, this problem, if considered as a Math problem, is incomplete and therefore DEFECTIVE.
Indeed, it says that the loan is for one year and 4 months.
But this time period is not exactly integer number of quarters.
The Math does not teach us (does not teach me, at least), what to do and how to compound an amount discretely,
when the time is not integer number of compounding periods.
May be, it is written in accompanying papers; may be, there is a special agreement for it . . .
May be, there are special rules in Finance to regulate such circumstances.
But it is just out of Math; therefore, I consider this (supposedly) Math problem as defective.
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