Sydney Grammar 0:4 20-7 A company borrows $800000 to update its car fleet. The intere compounded monthly. It pays off the loan by 24 equal monthly ins instalment is paid one month after the loan is taken out Let A, be the amount owing after n instalments are paid. Let M be the amount of each instalment. rate is 12% pa. alments. The first (i) Show that the amount owing after two months is A> = 816080 — M(2-01) 2 000 x 1-0124 (ii) Show that as = 500% 5 1 1 (iii) Hence calculate M to the nearest dollar. i (iv) After paying ten instalments, the company decides to increase its repayments to [3 $60000 each month. Find the total number of months it takes the company to pay off its debt. Michael is about to retire and has arranged for his superannuation lump sum of $P to be deposited into an account which earns 3% per annum interest, with interest paid monthly on the balance. He intends to withdraw $6400 at the end of each month to live off Suppose that $4, is the balance immediately after the nth withdrawal. (i) Use the fact that Ay = P(1-0025) ~ 6400 to determine an expression for Ay. 1 (ii) Hence show that Ay = P(1-0025)° — 6400(1-0025)? — 6400(1-0025) — 6400, 1 (iii) Pind the value of P to the nearest integer if the balance will be zero after the [2 180th withdrawal.