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GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2931
Given Kudos: 1283
GPA: 3.39
Louie takes out a three-month loan of $1000. The lender charges him 10
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22 Apr 2022, 07:57
22 Apr 2022, 07:57
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Question Stats:
60% (03:04) correct
40% (01:51) wrong based on 5 sessions
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Louie takes out a three-month loan of $1000. The lender charges him 10% interest per month compunded monthly. The terms of the loan state that Louie must repay the loan in three equal monthly payments. To the nearest dollar, how much does Louie have to pay each month?
A. 333
B. 383
C. 402
D. 433
E. 483
A. 333
B. 383
C. 402
D. 433
E. 483
GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2931
Given Kudos: 1283
GPA: 3.39
Re: Louie takes out a three-month loan of $1000. The lender charges him 10
[#permalink]
26 Apr 2022, 09:46
26 Apr 2022, 09:46
1
Expert Reply
Let the monthly payment be \(x\).
After the 1st month there will be \(1,000*1.1-x\) dollars left to repay;
After the 2nd month there will be \((1,000*1.1-x)*1.1-x=1,210-2.1x\) dollars left to repay;
After the 3rd month there should be 0 dollars left to repay: \((1,210-2.1x)*1.1-x=0\) --> \(1331=3.31x\) --> \(x\approx{402}\)
Answer: C.
After the 1st month there will be \(1,000*1.1-x\) dollars left to repay;
After the 2nd month there will be \((1,000*1.1-x)*1.1-x=1,210-2.1x\) dollars left to repay;
After the 3rd month there should be 0 dollars left to repay: \((1,210-2.1x)*1.1-x=0\) --> \(1331=3.31x\) --> \(x\approx{402}\)
Answer: C.
gmatclubot
Re: Louie takes out a three-month loan of $1000. The lender charges him 10 [#permalink]
26 Apr 2022, 09:46
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