Question

Help!!!!!!

Miguel's monthly car payment is 234.85. The recursive formula B (sub) n=[1.005B (sub) n-1 ]-234.85 describes the balance left on the loan after n payments. Find the balance of the 10000 loan after each of the first eight payments.

Answer 1

Do you know the formula to finding interest?

Answer 2

the basic recursive formula is An=A(n-2)+A(n-1)

Answer 3

but I typed out the questions formula, I don't know if it's the same

Answer 4

Hmmmm.........Then I am not sure

Answer 5

alright, thanks for trying!!!

Answer 6

Okie. ;)

Answer 7

It seems from the information already given, we already know the monthly payment $234.85 the loan amount $10,000 and the interest (.005 monthly or .005 * 12 = .06 annually). What we need is the time.

The formula for the time is located here http://www.1728.org/loanfrm3.htm and this calculates to 4 years. (either using the formula or using the calculator located here http://www.1728.org/calcloan.htm
Now in terms of the balance for payments 1 through 8 use the calculator located here: http://www.1728.org/mortmnts.htm
This produces
Month Balance
1 $9,815.14
2 $9,629.37
3 $9,442.67
4 $9,255.03
5 $9,066.45
6 $8,876.94
7 $8,686.47
8 $8,495.05

Granted I did not fully work out any of the answers because that would be a lot of work. However, I believe those three links and those answers will show you exactly what you have to do and if you need my help, I can help you work out the answers.