Question

Deborah purchases a Copy Machine for her business; using the Installment-Buying method, the price tag on the copier is55000 with add-on-interest of 7% for 3 years.Finda) SIMPLE INTEREST FUTURE VALUE$6125

Answer 1

$168.06

Step-by-step explanation:

Price tag = $5000

Principal = 5000

rate = 7% = 0.07

time = 3 years

Using the simple interest formula:

`\begin{gathered} I\text{ = PRT} \\ I\text{ =interest} \\ I\text{ = 5000 }*\text{ 0.07 }*\text{ 3} \\ I\text{ = \$}1050 \end{gathered}`
`\begin{gathered} FV\text{ = I + P} \\ FV=\text{futue value} \\ FV\text{ = 5000 + 1050} \\ FV\text{ = \$6050} \end{gathered}`

The monthly payment:

`\begin{gathered} 12\text{ months = 1 year} \\ nu\text{mber of months in 3 years = }3(12)\text{ = 36 months} \\ \text{monthly payment = }\frac{future\text{ value}}{nu\text{mber of months}} \end{gathered}`
`\begin{gathered} \text{monthly payment = }(6050)/(36) \\ monthly\text{ payment = 168.0556} \\ To\text{ the nearest hundredth, the monthly payment is \$168.06} \end{gathered}`