Apps. and Interpretation for IBDP Maths Ebook 1 | Page 97

(d)
By considering the amounts of interest paid in both options, state the better option
for Takumi and explain the answer.
[2]
2. Bosco needs to settle a payment for his postgraduate programme. He is suggested by a
bank to choose one of the two options to repay the loan of $40000 with a nominal annual
interest rate of 4.5%:
Option 1: A deposit of $10000 has to be paid at the beginning of the loan, followed by a
total of 36 equal monthly payments at the end of each month
Option 2: A monthly payment of $800 has to be paid at the end of each month until the
loan is fully repaid
(a)
If Bosco selects the option 1, find
(i)
the amount of monthly payment,
(b)
(ii)
the amount of interest paid.
If Bosco selects the option 2, find
[6]
(i)
the number of months to repay the loan, rounding up the answer correct to
the nearest month,
(ii) the amount of interest paid.
[6]
(c) By considering the amounts of monthly payment in both options, state the better
option for Bosco and explain the answer.
[2]
(d) By considering the amounts of interest paid in both options, state the better option
for Bosco and explain the answer.
[2]
The bank also suggested the option 3 to Bosco, such that a total of 60 equal monthly
payments of $900 have to be paid at the end of each month, with a nominal annual
interest rate of r %
9
(e) Find the value of r .
[3]
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