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  1. MHB Apprentice

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    #1
    Can anyone help me with this problem? I'm stuck

    When will a payment of 300,000 galleons cancel Mr. Weasley’s liabilities to Gringott’s Bank of 100,000 galleons due after 2 years and 150,000 galleons due after 5 years if money is worth at an effective rate of 12%?

  2. MHB Craftsman

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    #2
    Quote Originally Posted by pixie View Post
    When will a payment of 300,000 galleons cancel Mr. Weasley’s liabilities to Gringott’s Bank of 100,000 galleons due after 2 years and 150,000 galleons due after 5 years if money is worth at an effective rate of 12%?
    HINT:
    u = PV of the 100,000
    v = PV of the 150,000
    w = PV of the 300,000
    w = u + v

    You'll need to use logs:
    remember that if a^p = x, then p = log(x) / log(a)

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