Can you check if this is right?

Hello omgind. Overall, your setups and calculations look good. However, I see two rounding issues, in your work.

The results for A (13270.21 and 13115.79) are not properly rounded.

Also, at the very end, you rounded the interest amounts to the nearest dollar.

Therefore, the amount you reported for "how much less" Tom pays is off by 42 cents.

By the way, when we write percents as ratios (over 100), we drop the percent sign. For example:

Don't write 7.2% as (7.2/100)%. Write 7.2/100, instead. If you write a percent sign and divide by 100 both, then you're instructing readers to divide by 100 twice. The following are correct.

7.2% = 7.2/100 = 0.072

(7.2/100)% = 0.072% = 0.072/100 = 0.00072

It's also bad form to use equals signs between steps as an abbreviation for something like, "so the next step is". In other words, avoid writing equations like:

7.2/100 = 0.072/2

Such equations are false. A correct way would be:

i = 7.2/100 = 0.072,
so i/n = 0.072/2

?
 
Otis said:
Hello omgind. Overall, your setups and calculations look good. However, I see two rounding issues, in your work.

The results for A (13270.21 and 13115.79) are not properly rounded.

Also, at the very end, you rounded the interest amounts to the nearest dollar.

Therefore, the amount you reported for "how much less" Tom pays is off by 42 cents.

By the way, when we write percents as ratios (over 100), we drop the percent sign. For example:

Don't write 7.2% as (7.2/100)%. Write 7.2/100, instead. If you write a percent sign and divide by 100 both, then you're instructing readers to divide by 100 twice. The following are correct.

7.2% = 7.2/100 = 0.072

(7.2/100)% = 0.072% = 0.072/100 = 0.00072

It's also bad form to use equals signs between steps as an abbreviation for something like, "so the next step is". In other words, avoid writing equations like:

7.2/100 = 0.072/2

Such equations are false. A correct way would be:

i = 7.2/100 = 0.072,
so i/n = 0.072/2

?
Click to expand...
Is that better?
 
omgineedhelp123 said:
… would the whole answer be wrong?
Click to expand...
No, the first part of your answer is correct: "Tom will pay the lesser amount".

The incorrect part is the part that I'd mentioned: "He will pay $154 less". That dollar amount is not properly rounded.

We round dollar amounts to the nearest cent, unless otherwise instructed. The exercise statement doesn't say anything about rounding differently.

?
 
omgineedhelp123 said:
Is that better?
Click to expand...
Were you instructed to round all amounts to the nearest dollar, instead of to the nearest cent?

Also, your work still contains false equations, as I'd mentioned earlier.

If there's anything in a reply that you don't understand, please let us know.

?
 
Since both borrowed the same amount for the same length of time you do not need to use $10,000 and 4 years. Just see what happens to $1 in a year--That is, suppose they each borrowed $1 for 1 year as described above.

1(1+.072/2)^2 vs 1( 1+ .068/12)^12 OR 1.073296 vs 1.07015988025 . So one pays the equivalent to 7.3296% per year and the other pays 7.015988025% per year.

I now see that you want to know the difference. Then we calculate $10,000(1.073296^4 - 1.07015988025^4) = 154.421304701
 
Last edited:
No my teacher didn’t tell me to round or anything. She didn’t specify that but I fixed the rounding. Thanks!
 
Beer soaked speculation follows.
I see two possible payment schemes with this problem.
The first, the unlikely lump sum payment scheme at the end of 4 years as discussed so far.
The second, the more likely (since it's easier to pay on installments) amortized semiannual and monthly payment schemes. Both schemes gives the impression that Tom made the wiser choice since he pays less interest.
The second scheme disagrees with the amount calculated so far.
 
You must log in or register to reply here.
Top