Question

Amina wants to buy a car at $5000 and agreed to pay $800 initially and remaining amount to be equally paid monthly on simple interest, rate of 5% per month in 4 months. What is monthly payment he has to do?​

Answer 1

outstanding balance: $5000-800=$4200 to be paid monthly in equal instalments on the basis of simple interest, at 5% per month, in 4 months' time.

cash payment: $800 remainder in 4 months, interest rate = 5%

interest is calculated: 4200*0.05*4=$840

amount to be paid with interest: $5040

monthly payment due:(4200+840)/4=$1260

Explanation: