SOLUTION: John puts R3000 on a second hand car and contracts to pay the balance in 24 monthly installments of 400 each,if interest is charged at a rate of 24% per annum payable monthly:
1.1
Algebra.Com
Question 1196132: John puts R3000 on a second hand car and contracts to pay the balance in 24 monthly installments of 400 each,if interest is charged at a rate of 24% per annum payable monthly:
1.1. how much did the car cost when John purchased it?
1.2. how much interest does he pay?
Answer by math_tutor2020(3817) (Show Source): You can put this solution on YOUR website!
L = loan amount = unknown
P = monthly payment = 400
i = monthly interest rate = 0.24/12 = 0.02
n = number of months = 24
Use those values in the monthly payment formula to solve for L
P = (L*i)/(1 - (1+i)^(-n))
400 = (L*0.02)/(1 - (1+0.02)^(-24))
400 = (0.02L)/(0.37827851206116)
0.02L = 0.37827851206116*400
0.02L = 151.311404824464
L = 151.311404824464/0.02
L = 7565.5702412232
L = 7565.57
This is the loan amount.
John made a down payment of R3000
He is loaned R7565.57 to pay the remaining cost of the car.
The price of the car is 3000+7565.57 = R10,565.57
===========================================================
John makes 24 payments of R400 each
He pays a total of 24*400 = R9600
This total consists of principal (the amount he was loaned) and interest.
Subtract off the loan amount to find the interest
9600 - 7565.57 = R2034.43 is the interest.
The down payment is NOT part of this calculation.
As far as the bank is concerned, the car costs R7565.57
===========================================================
Answers:
The price of the car is R10,565.57
The total interest paid is R2034.43
RELATED QUESTIONS
A second-hand car was bought for ₱100,000 downpayment and
monthly installments of... (answered by yurtman,ikleyn)
A man purchases a pressure cooker priced ₹120 on the condition that he will pay ₹25... (answered by Theo)
Three friends buy a second-hand equipment that costs PhP 120,000. They give a downpayment (answered by Boreal)
Three friends buy a second-hand equipment that costs PhP 120,000. They give a downpayment (answered by CPhill)
A person borrows $3,600 and agrees to repay the loan in monthly installments over a... (answered by jim_thompson5910)
off with monthly payments where f is the finance charge on the Loan p is the number of... (answered by Theo)
A real estate company sells its premium house model at 2,500,00.00 Php. One can pay it in (answered by Theo)
The Martinezes are planning to refinance their home. The outstanding balance on their... (answered by Solver92311)
If you buy a computer directly from the manufacturer for $3098 and agree to repay it in... (answered by solver91311)