Question

Kenya plans to make a down payment plus monthly payments in order to buy a motorcycle. At one dealer she would pay $2,500 down and $150 each month. At another dealer, she would pay $3,000 down and $125 each month. After how many months would the total amount paid be the same for both dealers? What would that amount be?

Answer 1

Let us say that the total amount paid in the first dealer is P1 and the total amount paid to the second dealer is P2. So that:

P1 = 2500 + 150 t

P2 = 3000 + 125 t

Where t is the total number of months

Now we are asked when the total amount paid would be equal for the two dealers, this means P1 = P2, therefore equating the two:

2500 + 150 t = 3000 + 125 t

25 t = 500

t = 20 months

Therefore the total amount paid for both dealers would be equal after 20 months.