Problem #1

1.Total amount borrowed: For calculating the total amount of the money borrowed we find 80% of
$220,000:
80
∗ 220,000 = 176,000
100
2.Formula for the annual interest rate: We first find the total interest paid for a particular year x.
Then we divide that value by the amount that was borrowed. The formula for the total interest paid
for a particular year is:

12(616 − (12(𝑥 − 1)) ∗ 0.9986) − 65.9076

Now we divide this by the amount borrowed

12(616 − (12(𝑥 − 1)) ∗ 0.9986) − 65.9076

176,000
To calculate the % we multiply it by 100

12(616 − (12(𝑥 − 1)) ∗ 0.9986) − 65.9076

100
176,000

Derivation of the formula: So, what are the new-year months? They are 1,13,25,37… First we need
to figure out a formula for this. Using the table of 12 the formula is 12(𝑥 − 1) + 1. Now we need to
figure out the Interest value of the 12(𝑥 − 1) + 1 month. We can plug this in in to the monthly
interest formula(by replacing k). So, it becomes: 616 − (12(𝑥 − 1))0.9986. Since year has 12
month we can multiply this by 12. But Cleary that wouldn’t give us the total value as the value keeps
on decreasing. You have to multiply 0.9986 k-1 times. Since there is no need to change the 1st month
value we can add all the numbers from 1 to 11 and multiply the sum with 0.9986. We can then
subtract the product the form the rest of the formula.

3.Formula for the kth principal payment: I had already tried to find a common ratio between the
principal payments by dividing the consecutive payments, but the ratio was not constant-It changed
slightly. See the table below:

The decimal value remains the same until the thousandth position (1.003). If we use this value are
the common ratio then the formula for the kth principal payment will be: (𝑘 − 1)1.003 + 244.67.
We always multiply 1.003 by a number which is one less than the month.
4.Formula for the kth interest: Again, the ratio is not the same-it differs slightly. The decimal value
remains the same until the thousandth position (0.9986). If we use this value are the common ratio
then the formula for the kth principal payment will be: 616 − (𝑘 − 1)0.9986.

Problem #2

When I compare the ratio of the principal payment (1.003) and monthly interest rate, the values are
not the same. Here are the calculations for monthly interest rate.

Monthly interest rate: Interest paid/outstanding principal.

• 1st month: 616/(176000-244.67)= 0.00350487237

• 2nd month: 615.14/(176000-(244.67+245.53))= 0.00350487551
• 3rd month: 614.28/(176000-(244.67+245.53+246.39))= 0.00350489585

Problem #3

1.The method shown above is a quick way of adding a geometric sequence. Since a geometric
sequence has a constant common ratio, multiplying the sum of the sequence by that common ratio
will consists of subtracting the first term(since that does not have the common ratio)and add the
next term in the sequence. Then we can subtract the two sequences together (since the middle part
reams the same we have to do: new term added-term removed). Then we can divide the answer to
get the value of S. (In this case we divide the answer with 3)

𝑆 = 1 + 3 + 9 + ⋯ + 177,147
3𝑆 = 3 + 9 + ⋯ + 177,147 + 531,441
3𝑆 − 𝑆 = 531,441 − 1
2𝑆 = 531,440
𝑆 = 265720

𝑆 = 7 + 14 + 28 + ⋯ + 57,344
2𝑆 = 14 + 28 + ⋯ + 57,344 + 114,688
2𝑆 − 𝑆 = 114,688 − 7
 𝑆 = 114681

𝑆 = 50 + 20 + 8 + ⋯ + 0.032768
𝑆
= 20 + 8 + 0.032768 + 0.0131072
2.5
𝑆
− 𝑆 = 0.0131072 − 50
2.5
−1.5𝑆
= −49.9868928
2.5
0.6𝑆 = 49.9868928
1
S = ( )(49.9868928)
0.6
𝑆 = 83.311488

3.This process will help in adding interest or principal payments. See the example below:

𝑃 = 244.67 + 245.53 + ⋯ + 251.61 + 252.49

1.003𝑃 = 245.53 + 246.39 + ⋯ + 252.49 + 253.24747
1.003𝑃 = 1𝑃 = 253.24747 − 245.53
0.003𝑃 = 7.71747
𝑃 = 2572.49
Problem #4

1.Formula for the sum of the principal payments:

𝑡(𝑡 − 1)
244.67𝑡 + 1.003
2
2.Subsituting the value of 20 years: Since the value of k is in months we have to convert 20 years
into months=20*12=240.
239 ∗ 240 57360
244.67 ∗ 240 + 1.003 = 58720.8 + 1.003 = 58720.8 + 28680 ∗ 1.003 = 87486.84
2 2
The total principal amount paid after 20 years will be: $87486.84.

3.Finding the term of the loan:

𝑡(𝑡 − 1)
244.67𝑡 + 1.003 = 176,000
2
𝑡2 − 𝑡
244.67𝑡 + 1.003 = 176,000
2
1.003𝑡 2 − 1.003𝑡
244.67𝑡 + = 176,000
2
 244.67𝑡 + 0.5015𝑡 + 0.5015𝑡 2 = 176,000

𝟐𝟒𝟒. 𝟏𝟔𝟖𝟓𝒕 + 𝟎. 𝟓𝟎𝟏𝟓𝒕𝟐 = 𝟏𝟕𝟔, 𝟎𝟎𝟎

I don’t know how to solve this equation further…

Problem #5

Loan money will be 80% of 23,000:

18,400 is the total principal amount.

The total Interest will be:

The total interest will be 2208.

The total money that has to be paid is 20608

1.Total monthly payments: Money that has to be: paid/months

2.Monthly Principal and Interest payments:

• 36.8 is the interest that has to be paid every month.

• 306.666 is the principal that has to be paid every month.

3.If the down payment is 10%:

Loan money will be 90% of 23,000:

90
∗ 23,000 = 20,700
100
18,400 is the total principal amount.

The total Interest will be:

2.4
∗ 20700 = 496.8
100
496.8 ∗ 5 = 2484
The total interest will be 2484

2824 + 20700
The total money that has to be paid is 23524

Total monthly payments: Money that has to be: paid/months

 23524
= 392.066
60

I am working on Problem #6 and the Binary Coding Problem.