A customer has taken three loans from the bank and the tenure of each loan is 5 years

JeffM said:
Eddy

Is there a context to this problem? I mean, do you know what topic it relates to? I have a very good guess (and I strongly suspect SK and I share the same guess). A lot of math is recognizing what mathematical tools are relevant, but such recognition comes from experience. When you are first learning, a substitute for experience is knowing what topic gave rise to a problem.

The problems you ask about seem to come from all over the place, and this diversity of source gets in the way of your developing a solid base of repeated experience.

This problem obviously comes from an Indian source: rupees were introduced as a monetary unit at least as early as the Mughals, and lahk is a Hindi word. But is there any clue about the general topic?
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yes, it is from a friend who is from India. He sent it to me. He got it in a course he is taking in finances
 
Wait a minute. I see one post says the problem is related to the concept of MEAN.

What is the general mathematical meaning of mean?
 
YES. Another way to say ir is “measure of central tendency.” It means a single good substitute for multiple numbers.

Are you aware that there are multiple types of mean?
 
I am aware there these type of mean: arithmetic mean, weighted mean, geometric mean.
I have read up on them and studied them all.
 
Subhotosh Khan said:
At the end of 1 year,

how much interest (money) would he have to pay for the Home loan?​
​
how much interest (money) would he have to pay for the Car loan?​
​
how much interest (money) would he have to pay for the personal loan loan?​

How did we get:

What is the rate of interest for the overall $ 500,000?​

What is that "overall"?
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INTEREST ON THE HOME LOAN =9 %
On the car loan=11%
on the personal loan 14%

I took all that to decimal form
 
Well i’ll bet you dollars to donoughts that the point of this problem is to recognize the relevance of a weighted arithmetic mean, which was SK’s point in post 3.

PS Maybe I should be betting annas to chapatis.
 
JeffM said:
Well i’ll bet you dollars to donoughts that the point of this problem is to recognize the relevance of a weighted arithmetic mean, which was SK’s point in post 3.
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Essentially, yes, but not so easy to recognize at first glance. Weighted-arithmetic mean is synonymous with finding expectation in probability. Let [imath]I[/imath] be the interest rate with the following distribution:
[math]I=\begin{cases} .14 &\Pr(I=.14)=\frac{200,000}{5,000,000}=.04 \\ .11 &\Pr(I=.1)=\frac{800,000}{5,000,000}=.16 \\ .09 &\Pr(I=0.09)=\frac{2,000,000}{5,000,000}=.8 \end{cases}[/math][math]E[I]=.14(0.04)+.11(.16)+.09(.8)=0.0952[/math]
 
BigBeachBanana said:
Essentially, yes, but not so easy to recognize at first glance. Weighted-arithmetic mean is synonymous with finding expectation in probability. Let [imath]I[/imath] be the interest rate with the following distribution:
[math]I=\begin{cases} .14 &\Pr(I=.14)=\frac{200,000}{5,000,000}=.04 \\ .11 &\Pr(I=.1)=\frac{800,000}{5,000,000}=.16 \\ .09 &\Pr(I=0.09)=\frac{2,000,000}{5,000,000}=.8 \end{cases}[/math][math]E[I]=.14(0.04)+.11(.16)+.09(.8)=0.0952[/math]
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I got to that answer in post # 13
 
The division I did was right by all accounts, right
Over 5,000,000
But what about the 5 years? What did you do with that fact?
 
JeffM said:
Well i’ll bet you dollars to donoughts that the point of this problem is to recognize the relevance of a weighted arithmetic mean, which was SK’s point in post 3.

PS Maybe I should be betting annas to chapatis.
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Jeff, what did you mean by that by recognizing the relevance of a weighted arithmetic mean?
 
Did you mean that we could've first have found the mean of those loans?.
 
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