Question

John decides to purchase a TV using an installment plan for the upcoming Super Bowl. He needs to put 20% down on the$2,038 TV. The remaining balance he would pay back over the next 3 years. The monthly payments using the installmentplan are $50.49. What is the finance charge? Round your answer to the nearest cent. Do not include a dollar sign in youranswer.

Answer 1

In order to determine the finance charge, proceed as follow:

Calculate the 20% of 2,038:

`(20)/(100)\cdot2038=407.6`

Then, the inial amount John pays is $407.6.

The next three years he pays $50.49 per month, which is a total of:

$50.49*36 = $1,817.64 (you multiplied by 36 because 3 years have 36 month)

Then, the total amount of money John pays is:

$407.6 + $1,817.64 = $2,225.24

The original price of the TV was $2,038. The finananca charge is the difference betwee the previous result and the original price:

finance charge = $2,225.4 - $2,038 = $187.24

The finance charge is