Math Problem Statement
Lissa, the owner of a health food store, was advanced $15 000 by an investor. She signed a promissory note that stated the conditions of the loan: interest will accumulate at a rate of 2.6%, compounded quarterly, and payments of $1200 will be made at the end of every 3-month period. a) How long will it take Lissa to repay her investor? b) How much interest will Lissa pay?
Solution
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Math Problem Analysis
Mathematical Concepts
Finance
Compound Interest
Loan Amortization
Time Value of Money
Formulas
Compound interest formula: A = P(1 + r/n)^(nt)
Loan amortization formula: PV = PMT × [(1 - (1 + i)^(-n)) / i]
Theorems
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Suitable Grade Level
Grades 10-12
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