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.

This is a Diff.Eq. problem.

Question

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.

This is a Diff.Eq. problem.

austinl · Answer

Not sure why the $\LaTeX$ isn't displaying above.

austinl · Answer

Got the answer everybody, $3086.64 a year, 9259.92 over three years, 1259.92 in interest.