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You buy items costing $1000 and finance the cost with a fixed installment loan for 30
months at 4% simple interest per year.
a. What is the finance charge?
b. What is your monthly payment?

Sagot :

Francocanacariidn

Answer:

The monthly payments will be $ 36.66, and the finance charge will be $ 100.

Step-by-step explanation:

Since I buy items costing $ 1000 and finance the cost with a fixed installment loan for 30 months at 4% simple interest per year, to determine what is the finance charge and what is my monthly payment, the following calculations must be performed:

1 year = 12 months

30 months / 12 = 2.5 years

(1000 x (1 + (0.04 x 2.5))) / 30 = X

(1000 x (1 + 0.1) / 30 = X

(1000 x 1.1) / 30 = X

1100/30 = X

36,666 = X

Therefore, the monthly payments will be $ 36.66, and the finance charge will be $ 100.

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