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September 9th, 2012, 07:29 PM   #1
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% payment loan

As example, a $1,000.00 loan is repaid with monthly payments being 3% of balance owing;
with interest at 1% per month, this is what the loan looks like after 2 payments:
Code:
N    PAYMENT  INTEREST    BALANCE
0                         1000.00
1      30.00     10.00     980.00
2      29.40      9.80     960.40
a = amount borrowed
i = monthly interest rate (.01 in above)
m = minimum pay't rate (.03 in above)
n = number of payments made

Gimme a formula that gives balance owing after n payments.
In terms of a,i,m,n , of course.
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July 8th, 2016, 05:22 PM   #2
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If 3% of the balance is paid and interest of 1% accrues every month, then the balance decreases by 2% every month. If, at some point, the balance is "A" then the next month, it will be A- 0.02A= (0.98 )A. Thus, after t months, the balance will be (0.98 )^n(1000). The general formula would be a(m-i)^n.
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