(3.1.8) A loan at rate i (12) = 0.12 is repaid with 120 monthly payments starting one month after the loan. The amount of the first payment is 600 and each subsequent payment is 5 larger than the previous payment. Find The original amount of the loan. Find P R1 and use the result of Excercise 3.1.7 to show that P Rt = P R1(1.01)t1 + 5st1 i . Find OB60 prospectively, retrospectively, and by verifying that OB60 = L P60 k=1 P Rk, using the form of P Rk found earlier in this exercise.

3.1.7 Suppose that during the course of a loan, two successive periods have the same interest rate (i = 1+1 =). Show that PR+1 = PR. (1+i)+K+1-K. It then follows that if K +1 = K, and i, =i+1 = 1, then PR+1 = PR (1+i). 3.1.8 A loan at rate :(2) =.12 is repaid with 120 monthly payments starting one month after the loan. The amount of the first payment is 600 and each subsequent payment is 5 larger than the previous payment. Find the original amount of the loan. Find PR and use the result of Exer- cise 3.1.7 to show that PR, = PR (1.01)-!+5.57-1. Find OB6 pro- spectively, retrospectively, by verifying that OB60 = L-E PRK, using the form of PR found earlier in this exercise. Find 161. Find PR 1 using the formula above and also from PR1 = K61-861, and verify that they are equal. and 60 kal 3.1.7 Suppose that during the course of a loan, two successive periods have the same interest rate (i = 1+1 =). Show that PR+1 = PR. (1+i)+K+1-K. It then follows that if K +1 = K, and i, =i+1 = 1, then PR+1 = PR (1+i). 3.1.8 A loan at rate :(2) =.12 is repaid with 120 monthly payments starting one month after the loan. The amount of the first payment is 600 and each subsequent payment is 5 larger than the previous payment. Find the original amount of the loan. Find PR and use the result of Exer- cise 3.1.7 to show that PR, = PR (1.01)-!+5.57-1. Find OB6 pro- spectively, retrospectively, by verifying that OB60 = L-E PRK, using the form of PR found earlier in this exercise. Find 161. Find PR 1 using the formula above and also from PR1 = K61-861, and verify that they are equal. and 60 kal