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'Debt Race' printed from https://nrich.maths.org/
On 1st June 2008 five people A, B, C, D and E each borrow $100,000.
Each year, starting 1st June 2009, each is charged interest on the
amount owed at the start of the previous year, which is added to
the balance. Each year, each will pay off a lump sum of their debt,
which is taken from the balance.
The rates and amounts for each borrower is as follows:
| A |
B |
C |
D |
E |
| 3% |
6% |
9% |
12% |
15% |
| $12,000 |
$14,000 |
$16,000 |
$18,000 |
$20,000
|
The question is this: Which
borrower will be the first to pay off their debt?
Extension: You might like to
consider the importance of the figure $100,000 in this
calculation