Question

Johnny wants to buy a set of drums that cost $2000, it requires a 15% down payment. The remainder plus an additional finance charge is paid back on a monthly basis of 25 months. the monthly payment is $80. What is the finance charge.

Answer 1

Answer: The finance charge = $ 300

Explanation:

Given: cost of drums = $ 2000

Down payment = 15% of 2000

= 0.15 x 2000

= $300

Total installments = (Number of months) x (Monthly charge)

= 25 x $ 80

= $ 2000

Finance charge = Down payment + Total installments - cost of drums

= $ (300+2000-2000)

= $ 300

Hence, the finance charge = $ 300