Answer: each monthly payment is $145.3
Cumulative interest paid is $530.8
Explanation:
We would apply the periodic interest rate formula which is expressed as
P = a/[{(1+r)^n]-1}/{r(1+r)^n}]
Where
P represents the monthly payments.
a represents the amount of the television.
r represents the annual rate.
n represents number of monthly payments. Therefore
a = $4700
r = 0.07/12 = 0.0058
n = 12 × 3 = 36
Therefore,
P = 4700/[{(1+0.0058)^36]-1}/{0.0058(1+0.0058)^36}]
4700/[{(1.0058)^36]-1}/{0.0058(1.0058)^36}]
P = 4700/{1.23 -1}/[0.0058(1.23)]
P = 4700/(0.23/0.007134)
P = 4700/32.34
P = 145.3
The total amount paid in 3 years is
145.3 × 36 = $5230.8
Cumulative interest paid is
5230.8 - 4700 = $530.8