MHB How Much Does It Cost to Repay a $8000 Car Loan with 10% Interest in 3 Years?

[alane1994]

If a mod would like to change the title to something more fitting feel free.

A certain college graduate borrows 8,000 dollars to buy a car. The lender charges interest at an annual rate of 10%. Assuming that interest is compounded continuously and that the borrower makes payments continuously at a constant annual rate $k$, determine the payment rate $k$ that is required to pay off the loan in 3 years. Also determine how much interest is paid during the 3-year period.

 

[MarkFL]

Re: Not sure what to title.

Interestingly, I answered the first part of this question here, in a topic I brought here from Yahoo! Answers:

http://mathhelpboards.com/questions-other-sites-52/justcurious-question-yahoo-answers-regarding-mathematical-model-5470.html

Finding the amount of interest paid is just then the difference between the amount paid and the loan amount.

 

[alane1994]

Re: Not sure what to title.

Well, hey, would you look at that :p
I am going to look over your work, and try and make sense of it for me. Then I will attempt the second part of the problem. If I get nowhere, I shall come running to my buddies for help! :D

 

[alane1994]

Thanks very much for the help, I really appreciate it!