Question

2. Raul and Josephine buy a plasma TV from Sparky’s Electronics on an installment plan

(simple interest add on loan). They will pay the TV off in 3 years, paying 19.25% interest.
a. If the TV costs $1299.00, what will their monthly payments be?
b. If they make an $800 down payment up front, what will their payments be?

Answer 1

S.I=P*r/100*T
P=$1299.00
r=19.25%
T=3
=1299*19.25/100*3
=750.125
total money they will pay will be simple interest plus cost of tv set
=750.17+1299|=2049.17
in an year we have 12 month in 3 yrs it will be 12*3=36
per month they will pay 2049.17/36=56.92
$56.92
(b) if they pay 800 what will remain will be 1299-800=499
S.I=p*r/100*T
new p=499
rate and time remains
499*19.25/100*3=288.17
288.17+499=21.8659
=$21.87