The table shows part of a payment plan for Mr Lee who borrowed $50000 from a bank when he bought a car.
The bank charges an interest of 2.5% per annum, calculated on a monthly basis.
Mr Lee pays $1,000 at the end of each month.

1. Find the monthly interest for Month 3.

Monthly interest rate
$=\frac{2.5\%}{12}=\frac{0.025}{12}.$
For Month 3,
$a=48206.47\times \frac{0.025}{12}=100.4301458\ldots$
$a=\$100.43$

2. Find the amount owed at the beginning of Month 4.

Amount outstanding at the end of Month 3
$=48206.47+100.43-1000$
$=47306.90.$
This is the amount owed at the beginning of Month 4, so
$b=\$47306.90.$