Math Word Problem

Question

Suppose that you and your friend both need to borrow the same amount of money. 

1. You borrow money from Bank A, which offers loans at an annual interest rate of 4.6% with continuous compounding.
2. Your friend borrows money from Bank B, which offers loans an annual interest rate of 3.2% with monthly compounding. 

If both loans have the same future value and the term of your loan is 86 months, what is the term of your friend's loan (in months)?

Round your answer to the nearest month. 

Answer 1

If you know the continuous interest and the compound interest formulas, you simply set them equal to each other (because they say the future values are the same) with the same principle investment (as stated in the problem) and plug in all the other info given. Then you just do algebra and stuff. It helps if you know how logarithms work. Enjoy the video :)