ADAPT solution is weird
A loan of 60,000 is repaid over ten years with semiannual payments at a nominal interest rate of 6% compounded semiannually. The first payment is $3,000 and is paid 6 months from the date of loan. For the first five years, each subsequent payment will be $300 more than the previous payment. After the 10th payment, each succeeding semiannual payment will be reduced by X until the loan is completely paid. Calculate X.
I thought 60000 = 3000*a[10] + v300(Ia)[9] + (v^10)(5700a[10] - X(Ia)[10])
The ADAPT solution is 60000 = 3000*a[10] + 300(Ia)[10] + (v^10)(5700a[10] - X(Ia)[10]).
All at 3%.
Wouldn't their solution mean a payment of 3300 at t = 1?
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07-23-2012, 12:16 AM
Linear Mode
