Gyuhun takes out a loan of $1500 to furnish his new student apartment. The terms of the | IB MATHS |

Gyuhun takes out a loan of $1500 to furnish his new student apartment. The terms of the loan are that Gyuhun will pay cqual monthly instalments. Interest is calculated monthly and is charged at 12% p.a. The loan is to be repaid in two years.
$8000 is borrowed over a 2-year period at a rate of 12% p.a. Quarterly repayments are made and
the interest is adjusted each quarter, which means that at the end of each quarter, interest is charged
on the previous balance and then the balance is reduced by the amount repaid.