HornedWildebeas Posted October 9, 2008 Share Posted October 9, 2008 Ok so I'm trying to finish my Pre-Calc project and I cannot figure out what I am doing wrong. Here is the problem: I have a student loan for $32,016. For loan 1, the interest rate is 5%. Loan 2 has an interest rate of 6.8%. I am putting $400 each month toward the loan and am trying to figure out how long it will take to pay off each loan. Can anyone figure out what I am doing wrong? Obviously loan 1 will be payed off quicker but I keep getting loan 2 as the quicker payoff. I attached the problem. Hopefully it comes out ok. Thanks for any help loan problem.txt Link to comment Share on other sites More sharing options...
Sayonara Posted October 9, 2008 Share Posted October 9, 2008 (edited) For anyone dubious about downloading attachments from new members: Length of time it will take to pay off loan if use LOAN 1: A=P(1+r/k)^kt 32,016=400(1+.05/12)12t 80.04=1.004212t Log1.004280.04=12t Log 80.04/ log 1.0042=12t 1045.65=12t 88 months=t 7 years, 4 months Length of time it will take to pay off loan if use LOAN 2: A=P(1+r/k)^kt 32,016=400(1+.068/12)12t 80.04=1.005712t Log1.005780.04=12t Log 80.04/ log 1.0057=12t 771.05=12t 64.25 months=t 5 years, 5 months Edited October 9, 2008 by Sayonara³ Link to comment Share on other sites More sharing options...
HornedWildebeas Posted October 9, 2008 Author Share Posted October 9, 2008 Oh and btw its ^kt not multiplied kt. Didn't show up like that... Thanks say Link to comment Share on other sites More sharing options...
Sayonara Posted October 9, 2008 Share Posted October 9, 2008 Changed it to ^kt. It might help people to understand the problem if you define the terms in the equation. Link to comment Share on other sites More sharing options...
HornedWildebeas Posted October 9, 2008 Author Share Posted October 9, 2008 Alright A= total annuity P= principal R= rate (as a decimal) k= # of times compounded annually t= time (in years) Nevermind I figured it out. Turns out I had the wrong formula in the first place... Link to comment Share on other sites More sharing options...
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