Question

30. You buy items costing $400 and finance the cost with a simple interest fixed installmentloan at 6% simple interest per year. The finance charge is $48.a. How many years will you be paying?b. What is your monthly payment?

Answer 1

Given:

Costing = $400

Simple interest = 6%

Finance charge = $48

Simple interest formula is:

`\begin{gathered} =(P* R* T)/(100) \\ \end{gathered}`
`\begin{gathered} (P* R* T)/(100)=48 \\ (400*6* T)/(100)=48 \\ T=(48*100)/(400*6) \\ T=2 \end{gathered}`

For 2 year.

(b)

Monthly payment is:

`\begin{gathered} =(400)/(24)+(48)/(24) \\ =16.66+2 \\ =18.66 \\ \end{gathered}`

Monthly payment is $18.66