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theEric
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Hello! I'm working on a financerelated problem, and I'm not sure that I'm solving the ODE well!
Here's the prompt:
A certain college graduate borrows $8,000 to buy a car. The lender charges interest at an annual rate of \(10\%\). Assuming that interst is compounded \(\sf continuously\), and that the borrower makes payments \(\sf continuously\) at a constant annual rate \(k\), determine the payment rate \(k\) that is required to pay off the loan in \(3\) years. Also, determine how much interest is paid during the \(3\)year period.
The answers: \(k=$3086.64\ /\text{year}\); \($1259.92\)
 one year ago
 one year ago
theEric Group Title
Hello! I'm working on a financerelated problem, and I'm not sure that I'm solving the ODE well! Here's the prompt: A certain college graduate borrows $8,000 to buy a car. The lender charges interest at an annual rate of \(10\%\). Assuming that interst is compounded \(\sf continuously\), and that the borrower makes payments \(\sf continuously\) at a constant annual rate \(k\), determine the payment rate \(k\) that is required to pay off the loan in \(3\) years. Also, determine how much interest is paid during the \(3\)year period. The answers: \(k=$3086.64\ /\text{year}\); \($1259.92\)
 one year ago
 one year ago

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theEric Group TitleBest ResponseYou've already chosen the best response.0
Here's what I did. Let \(D\) be the debt in dollars. Note that \(\dfrac{dD}{dt}=D'=.10Dk\implies D'.10D=k\). I'll use \(C\) variables as arbitrary constants. Then \(\Large {D=e^{\int .10dt}\int (k)e^{\int .10dt}dt\\~\\~\\ =k\ e^{\int .10dt}\int e^{\int .10dt}dt\\~\\~\\ =k\ e^{.10t+C_1}\int e^{.10t+C_2}dt\\~\\~\\ =k\ e^{.10t+C_1}(10 e^{.10t+C_2}+C_3)\\~\\~\\ =k\ e^{.10t}e^{C_1}(10 e^{.10t}e^{C_2}+C_3)\\~\\~\\ =k\ e^{.10t}C_4(10 e^{.10t}C_5+C_3)\\~\\~\\ =k\ e^{.10t}C_4(10) e^{.10t}C_5k\ e^{.10t}C_4C_3\\~\\~\\ =k\ e^0C_4(10) C_5k\ e^{.10t}C_4C_3\\~\\~\\ =10k\ C_6k\ e^{.10t}C_7\\~\\~\\ =k\ C_8k\ e^{.10t}C_7}\)
 one year ago

theEric Group TitleBest ResponseYou've already chosen the best response.0
Where might I be making a mistake? This doesn't look right... I see that I can simplify: \(\Large\qquad\qquad\qquad = k(C_8e^{0.10t}C_7)\)
 one year ago

SithsAndGiggles Group TitleBest ResponseYou've already chosen the best response.1
I forget the reason behind it, but I'm pretty sure you just ignore the constant of integration when you find the integrating factor. I end up with \[D(t)=10k+Ce^{1/10~t}\]
 one year ago

theEric Group TitleBest ResponseYou've already chosen the best response.0
Okay! I solved on Wolfram Alpha and I think I got something like that! I have to check! But thank you! I was just using a formula that was derived with the integrating factor, I think. I don't quite understand it! :P
 one year ago

SithsAndGiggles Group TitleBest ResponseYou've already chosen the best response.1
You're welcome! And by the way, the reason (according to wikipedia) is that we only need *a* solution, not the general solution, to the integral.
 one year ago

theEric Group TitleBest ResponseYou've already chosen the best response.0
Hmm! Thanks! I'll probably look into this tomorrow when I'm less tired! :) Thank you very much, @SithsAndGiggles !
 one year ago
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