Solution:
As per the problem
Maxine took out a loan for $3200 at 8% interest, compounded annually.
she makes yearly payments of $250.
she will be able to Payoff her loan iff yearly payments made is greater than yearly interest.
Interest payable in first year [tex] =3200(1+0.08)-3200=3200*1.08-3200\\ [/tex]
Interest payable in first year[tex] =3456-3200=256 [/tex]
This payable interest will goes on increasing year on year.
Hence Maxine will never payoff the loan.
Answer: No, because $250 is less than the amount of interest she is charged per year.
Step-by-step explanation:
