Refer to Example 2. Answer questions (a) and (b) in Exercise 1 if the interest rate is 7%. How long will it take to pay off the $25,000 loan in this case?

Example 2

You took a loan of $25,000 to pay for a new car. The interest rate on the loan is 5%. You arranged through your online banking to make daily payments totaling $4800 per year. This allows you to assume that your payments are flowing continuously into your account. Let P(t) denote the amount that you owe on the loan at time t (in years). Assume that interest is compounded continuously. Set up an initialvalue problem that is satisfied by P(t).