Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Homework Help: Finance Problem

  1. Sep 19, 2006 #1
    Problem:

    Clarissa wants to buy a new car. Her loan officer tells her that her annual rate is 8%, compuded continously, over a four-year term. Clarissa informs her loan officer that she can make qual monthly payments of $225. How much can Clarissa afford to borrow?

    I figured that she will pay $10800 (48 months * $225)

    Skipping the differential derivation.....

    If A(t)=Ke^.08t ...whre t=4 and A(4)=10800......then k=$7842.41......is this the amount (principle) of the loan? I'm not accounting friendly :(
     
  2. jcsd
  3. Sep 19, 2006 #2
    that is correct
     
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook