Question

Now that your TV is in place, you feel you have to have surround sound to complete the system. The cost,

another $400. This time, though, you choose to put $25 down and must spread the payments over 3 years.
The best interest rate you can get this time is 12%. You decide it's worth it and buy the system.
a. How much did you finance?
b. How much will the interest be?
c. How much will the home theater sound system cost in total?

Answer 1

a. The financed amount is $375. b. The interest will be $135. c. The total cost of the home theater sound system is $510.

Step-by-step explanation:

a. To calculate how much you financed, subtract the down payment from the total cost of the sound system.
Financed amount = Total cost - Down payment
Financed amount = $400 - $25
Financed amount = $375

b. To calculate the interest, multiply the financed amount by the interest rate and the number of years.
Interest = Financed amount * Interest rate * Number of years
Interest = $375 * 0.12 * 3
Interest = $135

c. To calculate the total cost, add the financed amount to the interest.
Total cost = Financed amount + Interest
Total cost = $375 + $135
Total cost = $510