SOLUTION: The cost of a washer and dryer is $1100.00. We can finance this by paying $110.00 down and $54.00 per month for 24 months. A) Determine the amount finances: _____

SOLUTION: The cost of a washer and dryer is $1100.00. We can finance this by paying $110.00 down and $54.00 per month for 24 months. A) Determine the amount finances: ______ B) Determine t

Question 321648: The cost of a washer and dryer is $1100.00. We can finance this by paying $110.00 down and $54.00 per month for 24 months.
A) Determine the amount finances: ______
B) Determine the total installment price: _____
C) Determine finance charge: ________
Thank you!!!!!
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
Cost for the washer and dryer is $1100.00
You pay $110 up front.
Remaining cost to be financed is 1100 - 110 = $990.
You pay $54.00 for the next 24 months.
Effective Interest Rate is calculated to be 2.277136474 per month.
That equates to a nominal interest rate of 12 * 2.277136474 = 27.342563768% per year.
That's the nominal interest rate per year that you are paying on the amount of money you financed.
At the end of the 24 months, you will have paid a total of 24 * 54 = $1296.00
The total interest on the amount you financed was $1296 - 990 = $306.00
The total cost to you including your down payment and payments that you made over 24 months = 110 + 24*54 = $1406.
$1100 of that was for the price of the washer and dryer.
$306 of that was interest charges for the $990 that you financed over 2 years.

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