Question

Solve the problem.

24) Joe is buying some kitchen equipment for his new apartment. The total cost is $1900 and he places
a down payment of $190. There is add-on interest of 4%. What is the total amount to be repaid if he takes 5 years to pay for the purchase?
B) $2052.00
C) $35,910.00
D) None of the above is correct.
A) $1778.40

Answer 1

Joe's total repayment amount for the kitchen equipment, including a 4% add-on interest over 5 years on the financed amount after a down payment, is $2052.00, making option B the correct answer.

Step-by-step explanation:

Joe is buying kitchen equipment for his new apartment and the total cost is $1900. He places a down payment of $190, and there's an add-on interest of 4%. To calculate the total amount to be repaid over 5 years, we need to find the amount financed first, which is the total cost minus the down payment, then apply the add-on interest to this amount:

• Amount Financed: $1900 - $190 = $1710
• Add-on Interest over 5 years: $1710 × 4% × 5 = $342
• Total Amount to Repay: $1710 + $342 = $2052

The correct answer to the total amount to be repaid by Joe if he takes 5 years to pay for the purchase is $2052.00, which corresponds to option B.

Answer 2

Step-by-step explanation:

After paying the $190 he owes 1900 - 190 = 1710.

Interest on that = 0.04 * 1710 = $68.4.

So total amount = $1778.40.