Answer:
The description for the problem is listed throughout the section below on explanations.
Step-by-step explanation:
The given values are:
The amount of bank loan = $22,000
Interest rate = 7.99%
Pays monthly = $700
So, the principal amount decreases by 700 per month.
Now,
The principal amount at the end of the [tex]m^{th}[/tex] month = (22000 - 700 m)
Then,
The interest paid at the end of 1 year:
⇒ [tex](22000)0.0799+(22000-700)0.0799+...+(22000-700(11))0.0799[/tex]
On simplifying the above equation, we get
⇒ [tex]0.0799[12(22000)-\frac{11\times 12}{2}\times 700][/tex]
⇒ [tex]0.0799[264000-11\times 6\times 700][/tex]
⇒ [tex]0.0799[264000-46200][/tex]
⇒ $[tex]17402.22[/tex]
Therefore interest could be measured correctly at the end of each year, likewise.
⇒ [tex](2200-700m)R+(22000-700(m+1))R+...+(22000-700(m+11))R[/tex]
⇒ [tex]R[12\times 22000-700[12m+\frac{11\times 12}{2}]][/tex]
⇒ [tex]R[264000-700[12m+\frac{11\times 12}{2}]][/tex]
⇒ [tex]R[263300(12m+66)][/tex]
R : interest rate
