SOLUTION: Please help me with this, thank-you. Installment plant mike's sporting goods sell elliptical trainers under under 2 payment plans cash or installment under the installment plan the

Question 1178748: Please help me with this, thank-you. Installment plant mike's sporting goods sell elliptical trainers under under 2 payment plans cash or installment under the installment plan the customer pays $22/month over 3 years with interest charged on the balance at rate of 18%per year compounded monthly.find cash price for an elliptical trainer if it is equivalent to the price paid by a customer using the installment plan answer
Answer by CPhill(1959) (Show Source): You can put this solution on YOUR website!
Let's break down how to find the equivalent cash price of the elliptical trainer.
**1. Calculate the Total Number of Payments:**
* The customer pays $22 per month for 3 years.
* Total payments: 3 years * 12 months/year = 36 payments
**2. Calculate the Monthly Interest Rate:**
* The annual interest rate is 18%.
* The monthly interest rate is 18% / 12 = 1.5% = 0.015.
**3. Use the Present Value of an Ordinary Annuity Formula:**
* The cash price is equivalent to the present value of the installment payments.
* The formula is: PV = PMT * [1 - (1 + r)^-n] / r
Where:
* PV = Present Value (cash price)
* PMT = Monthly payment ($22)
* r = Monthly interest rate (0.015)
* n = Number of payments (36)
**4. Plug in the Values and Calculate:**
* PV = 22 * [1 - (1 + 0.015)^-36] / 0.015
* PV = 22 * [1 - (1.015)^-36] / 0.015
* PV = 22 * [1 - 0.580039] / 0.015
* PV = 22 * [0.419961] / 0.015
* PV = 22 * 27.9974
* PV ≈ $615.94
**Therefore, the cash price for the elliptical trainer is approximately $615.94.**

RELATED QUESTIONS
Mike's Sporting Goods sells elliptical trainers under two payment plans: Under the... (answered by Theo)

please help me under stand how to do this 4x^4-11x^2+6=0 thank... (answered by mananth)

graph x + 2y< 3 with a line under the sign 2x-3y < 6 with a line under the sign... (answered by stanbon)

Please help me solve this problem: what is the square root of n+9 (under square root... (answered by 303795)

I could not find any lessons for my brother on Adding and Subtracting algebraic... (answered by AnlytcPhil)

Please help me solve this and under what topic should I look for more of these Thank... (answered by stanbon)

I think I did this right, but I am not totally sure. Could you please tell me if I did? (answered by edjones)

65 inch length 60 inch height rectangle Under this an elliptical can form so plz guide... (answered by Alan3354)

Can you please help me to solve this problem for X: 2x (under radical) -... (answered by Earlsdon)