Question

Andy is buying a car.

He negotiated a 7% decrease on a 6,500 car.
He will pay the full balance in 12 equal monthly payments.
Calculate the amount payed each month.

Answer 1

The amount of car payed each month after 7% decrease in price is 503.75 unit

Explanation:

Given as :

The initial price of car = 6,500 unit

The decrease rate = 7%

The time period = 1 year

So, Final value = Initial value ×
`(1-(Rate)/(100))^(Time)`

So, Final value = 6,500 ×
`(1-(7)/(100))^(1)`

Or, Final value = 6,500 × 0.93

Or, Final value = 6,045 unit

So, The price of car after 7% decrease is 6,045 unit

Now This amount will be paid in 12 equal monthly payment

So, The amount payed each month =
`(6045)/(12)` = 503.75 unit

Hence The amount of car payed each month after 7% decrease in price is 503.75 unit Answer