A Challenging Problem on Compound Interest

A Challenging Problem on Compound Interest

Have a go at this problem on Sequences and Series! You will need to make use of your knowledge learnt on geometric progressions.

Problem:

To purchase a grand piano, Ken took a loan of $12,000 from a finance company on 1st October 2019. The company charges a compound interest at a rate of 0.5% on the outstanding amount owed on the last day of every month, while Ken decides to repay the loan by paying back a fixed instalment of $P on the first day of each month starting from 1st November 2019. Suppose he wants to repay the entire loan with exactly 12 instalments. Find the value of P.

View the worked solution here:

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