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Louie takes out a three-month loan of $1000. The lender charges him 10% interest per month compunded monthly. The terms of the loan state that Louie must repay the loan in three equal monthly payments. To the nearest dollar, how much does Louie have to pay each month?

ViktorStein
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user7144104
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    What have you tried? – ViktorStein Jul 01 '19 at 18:27
  • Actually, i am not getting any idea how to solve this problem. For instance, i know that 10% per month will be 100, but how do i come up with monthly payment ? – user7144104 Jul 01 '19 at 18:29
  • Unless you are dealing with gangsters, the $10%$ ought to be an annual number. – lulu Jul 01 '19 at 18:31
  • @ViktorGlombik I understand where your question is coming from and how it has been provoked, but please keep this in mind when asking it. I mean no disrespect towards you, but am just letting you know of this for good measure :) – Mr Pie Jul 01 '19 at 18:34
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    Regardless of the interpretation of the interest rate, this would appear to be the standard mortgage problem. The relevant mortgage formulas should apply. – lulu Jul 01 '19 at 18:35

1 Answers1

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The equation for compound interest is $P(1+ \frac{r}{n})^{nt}$ thus plugging in the numbers...

$1000(1+ \frac{.1}{1})^{1*3}=1331$ this divided by 3 is $443 \frac{2}{3}$