Amortizing a Loan:
A loan is paid off in equal monthly payments. Let A be the amount borrow at a monthly inerest rate r. A payment in the amount P is made at the end of each month to pay off the debt. Let X(n) by the amount owed at the beginning of the (n + 1) month after the interest for the n-th peried accrues and the n-th payment is made. Set up a difference equation for X(n) and solve it in terms of n, r, A, and P. If the debt is to be paid off after N months, fund P in terms of r, N, and A.
Hint: You may need the formula for the partial sums of the geometric series, i.e., summation from k = 0 to n-1 of a^k = (1 - a^n)/(1 - a)

Biggest problem is I'm not sure exactly what it's asking and on top of that I never became familiar with series.

1/17/2006 9:29:43 AM

hey, i can probably walk you through this stuff if you need, let me know.

1/17/2006 10:52:42 PM

ok yeah i think i have it, no promises though

1/17/2006 10:56:34 PM