Question

Fernando wants to purchase a new laptop for 2323000 columbian pesos. the electronic store has a financing offer. Fernando pays the electronic store in weekly installments over two years. i. What is the simple interest rate the electronics store is charging if he ends up paying it 2480000 pesos in total? ii. How much is weekly payment to the electronics store? Round your answer to the nearest Peso.

Answer 1

i) 3.38%

ii) 23846 pesos

Explanation:

The formula for Simple Interest =

Principal × Rate × Time

Simple Interest is calculated as:

Amount(after t years) - Principal(initial amount

From the question,

Amount = 2480000 pesos

Principal = 2323000 pesos

Simple Interest = (2480000 - 2323000)pesos

= 157000 pesos

i. What is the simple interest rate the electronics store is charging if he ends up paying it 2480000 pesos in total?

This means we are to find r, hence:

Simple Interest = Principal × Rate × Time

Time = 2 years

157,000= 2323000 × R × 2

R = 157,000/2323000 × 2

R = 157,000/4646000

R = 0.03379250968

Simple Interest rate = 0.03379250968

Converting to percentage

= 3.379250968%

≈ Approximately 3.38%

ii. How much is weekly payment to the electronics store? Round your answer to the nearest Peso.

We are told in the question that:

Fernando pays the electronic store in weekly installments over two years.

52 weeks = 1 year

Hences

2 years = 52 × 2 = 104 weeks

Weekly payments = 2480000 pesos/104 weeks

= 23846.1538462 pesos

Approximately to the nearest peso = 23846 pesos