Real-Life Math
You're a documentary film producer with a great idea for a new film:
it's about women in the textile industry. The problem is, you'll have to travel
to research and get the visuals for this subject. You know expenses will be
high.
While you have some grant money for the project, you figure you'll
need an extra $15,000 to complete the project.
You already have offers
from cable channels interested in showing the piece once it's completed. Based
on this, you've decided to take out a loan with a federal funding agency.
The
bank tells you it can loan $15,000 at an interest rate of 6 percent. Through
a special agreement, you're not required to make any payments on the principal
(the $15,000) of the loan until the film is finished.
You estimate
it will take a year to complete the project, and you want to
determine what you'll be spending on interest payments while you're working
on the film.
The representative at the funding agency has given you
this formula to help figure out the monthly interest payments:
Amount
of loan x 6 percent = total interest
Total interest / 365 days of the
year x the number of days from 1 payment to the next = monthly interest payment
You
will be making payments on this loan every 30 days. Using this formula, figure
out what your monthly payments will be on a loan of $15,000.