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Louie takes out a three-month loan of $1000. The lender charges him 10

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Louie takes out a three-month loan of $1000. The lender charges him 10 [#permalink] New post   22 Apr 2022, 07:57
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50% (03:09) correct 50% (01:51) wrong based on 4 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
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C
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Re: Louie takes out a three-month loan of $1000. The lender charges him 10 [#permalink] New post   26 Apr 2022, 09:46
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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≈402

Answer: C.
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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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