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Interest rate calculator: $50200 loan is repaid by 28 payments of $4700 each

eap

New member
Joined
Jun 12, 2016
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5
Hi, could someone please help my with a problem
[FONT=&quot]A $50200 loan is repaid by 28 payments of $4700 each at the end of year, followed by 10 payments of $4300 each at the beginning of the month. What interest rate (i1) is being charged?[/FONT]
 

stapel

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Staff member
Joined
Feb 4, 2004
Messages
15,937
A $50,200 loan is repaid by 28 payments of $4,700 each at the end of year...

So, for each of twenty-eight years, payments of $4,700 is made on 31 December?

...followed by 10 payments of $4300 each at the beginning of the month.
So the twenty-ninth payment is made on 01 January of the twenty-ninth year, in the amount of $4,300? And the last payment, in the amount of $4,300, is made on 01 October of that same year?

What interest rate (i1) is being charged?
What formula did they give you, from which you obtained the variable "i[SUB]1[/SUB]"? How far have you gotten in plugging into that formula?

Please be complete. Thank you! ;)
 

eap

New member
Joined
Jun 12, 2016
Messages
5
Clarify what happens at end of 28th year:
is the $4700 received on Dec.31, then $4300 on Jan.1st (1 day later),
or is the 1st $4300 received on Feb.1st?

Regardless, the interest rate cannot be calculated directly:
numeric method required.

If rate = 9.25%, then close to $2500 will remain owing,
IF 1st monthly payment is 1 month after last annual payment.

Hope that helps.
Hi, 9.25 is the right answer, thanks a lot!!
If you could send me the method you used to solve this problem I would really appreciate it!!
 
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