Question

Jean bought a $1,980 snow thrower on the installment plan. The installment agreement included a 10% down payment and 18 monthly payments of $116 each. How much did jean pay for the snow thrower on the installment plan? What is the total finance charge?

Answer 1

Jean paid $2,286 for the snow thrower, with a finance charge of $306.

Explanation:

Given that Jean bought a $ 1,980 snow thrower through an initial payment of 10% of the initial value, and 18 monthly payments of $ 116, to determine the final price paid by Jean, the following calculation is required:

(1,980 x 0.1) + (18 x 116) = X

198 + 2,088 = X

2,286 = X

Therefore, the final price paid for Jean was $ 2,286.

In turn, the finance charge arises from the difference between the final price and the list price, that is:

2,286 - 1,980 = X

306 = X

Thus, the finance charge is $ 306.