A bad loan Consider a loan repayment plan described by the
Chapter , Problem 37(choose chapter or problem)
A bad loan Consider a loan repayment plan described by the initial value problem B_1t2 = 0.03B - 600, B102 = 40,000, where the amount borrowed is B102 = +40,000, the monthly payments are $600, and B1t2 is the unpaid balance in the loan. a. Find the solution of the initial value problem and explain why B is an increasing function. b. What is the most that you can borrow under the terms of this loan without going further into debt each month? c. Now consider the more general loan repayment plan described by the initial value problem B_1t2 = rB - m, B102 = B0, where r 7 0 reflects the interest rate, m 7 0 is the monthly payment, and B0 7 0 is the amount borrowed. In terms of m and r, what is the maximum amount B0 that can be borrowed without going further into debt each month?
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