Answer: Amount of Interest (c) = $192.72
Total of Payments = $817.72
Total Number of Payments = 24, Monthly Payment = $29.03
Step-by-step explanation: Let's break down the given information:
Price of the drill press: $675.00
Down payment: $50.00
Number of months (n): 24 months
Annual interest rate: 14% or 0.14 (as a decimal)
First, we need to calculate the principal amount (amount financed) after the down payment:
Principal Amount = Price - Down Payment = $675.00 - $50.00 = $625.00
Now, let's use the formula for calculating the monthly payment (PMT) in terms of the principal (P), interest rate (r), and number of periods (n):
PMT = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
P = Principal amount
r = Monthly interest rate
n = Number of months
Monthly interest rate (r) can be calculated from the annual interest rate (0.14) as:
r = Annual Rate / 12 = 0.14 / 12 = 0.01167
Now, substitute the values and calculate the monthly payment (PMT):
PMT = $625.00 * (0.01167 * (1 + 0.01167)^24) / ((1 + 0.01167)^24 - 1)
PMT ≈ $29.03 (rounded to two decimal places)
Amount of Interest (c):
Total Payment (c) = Monthly Payment * Number of Payments - Principal
c = $29.03 * 24 - $625.00 ≈ $192.72
Total of Payments (amount financed + c):
Total of Payments = Principal + Interest
Total of Payments = $625.00 + $192.72 ≈ $817.72
Total Number of Payments and Monthly Payment:
Total Number of Payments = 24
Monthly Payment = $29.03
So, the answers are:
Amount of Interest (c) = $192.72
Total of Payments = $817.72
Total Number of Payments = 24, Monthly Payment = $29.03