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

  • Context: MHB 
  • Thread starter Thread starter alane1994
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Discussion Overview

The discussion revolves around calculating the payment rate required to repay an $8,000 car loan with a 10% annual interest rate compounded continuously over a period of 3 years. Participants explore both the payment rate and the total interest paid during this period.

Discussion Character

  • Mathematical reasoning

Main Points Raised

  • One participant presents the problem of determining the payment rate $k$ needed to pay off the loan in 3 years, along with the total interest paid.
  • Another participant references a previous discussion where they addressed part of the problem, suggesting that the interest paid can be calculated as the difference between the total amount paid and the original loan amount.
  • A third participant expresses intent to review the previous work and attempt to solve the second part of the problem, indicating a collaborative approach to understanding the calculations involved.
  • A later reply expresses gratitude for assistance, highlighting the supportive nature of the discussion.

Areas of Agreement / Disagreement

There is no clear consensus on the specific calculations or methods to be used, as participants are at different stages of understanding and problem-solving. Multiple approaches and interpretations appear to be present.

Contextual Notes

Participants have not yet resolved the mathematical steps required to find the payment rate or the total interest paid, and there may be dependencies on specific definitions or assumptions about continuous compounding.

alane1994
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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.
 
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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.
 
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
 
Thanks very much for the help, I really appreciate it!
 

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