document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1194969>Question 1194969</A>: <I><SPAN STYLE=\"word-break: break-all;\"> You purchased a laptop computer worth PhP 37,500 by a 30% down<BR>\n" );
document.write( "payment and agreed to repay the balance in 12 equal monthly payments.<BR>\n" );
document.write( "There is a 10% simple interest rate on this balance.\r<BR>\n" );
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document.write( "Find the finance charge\r<BR>\n" );
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document.write( "Find the amount of monthly payments\r<BR>\n" );
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document.write( "Estimate the APR </SPAN>\n" );
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document.write( "L = laptop's value = PhP 37,500<BR>\n" );
document.write( "D = down payment<BR>\n" );
document.write( "D = 30% of L <BR>\n" );
document.write( "D = 0.30*37,500 <BR>\n" );
document.write( "D = 11,250\r<BR>\n" );
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document.write( "P = amount borrowed<BR>\n" );
document.write( "P = L - D <BR>\n" );
document.write( "P = 37,500 - 11,250 <BR>\n" );
document.write( "P = 26,250<BR>\n" );
document.write( "Or<BR>\n" );
document.write( "P = 70% of L<BR>\n" );
document.write( "P = 0.70*37,500<BR>\n" );
document.write( "P = 26,250\r<BR>\n" );
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document.write( "r = 0.10 from the 10% simple interest rate<BR>\n" );
document.write( "t = 1 year timespan to repay the loan\r<BR>\n" );
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document.write( "Simple Interest:<BR>\n" );
document.write( "i = P*r*t<BR>\n" );
document.write( "i = 26,250*0.10*1<BR>\n" );
document.write( "i = 2,625<BR>\n" );
document.write( "This is the finance charge.\r<BR>\n" );
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document.write( "A = total amount needed to pay back<BR>\n" );
document.write( "A = P(1+rt)<BR>\n" );
document.write( "A = 26,250(1+0.10*1)<BR>\n" );
document.write( "A = 28,515<BR>\n" );
document.write( "Or<BR>\n" );
document.write( "A = P + Prt<BR>\n" );
document.write( "A = P + i<BR>\n" );
document.write( "A = 26,250 + 2,625<BR>\n" );
document.write( "A = 28,515\r<BR>\n" );
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document.write( "Either way, the amount needed to pay back is PhP 28,515\r<BR>\n" );
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document.write( "Divide this total over the 12 months.<BR>\n" );
document.write( "(28,515)/12 = 2,376.25<BR>\n" );
document.write( "This is the monthly payment.\r<BR>\n" );
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document.write( "Because there are 12 equal monthly payments, the repayment period is 1 year. There's a 10% simple interest rate which corresponds directly to the APR. <BR>\n" );
document.write( "In other words, the APR is 10%\r<BR>\n" );
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document.write( "If the loan repayment window was something else (say 30 days), then the APR would be some other value. <BR>\n" );
document.write( "If there were other fees involved, then the APR would be different.\r<BR>\n" );
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document.write( "Answers:<BR>\n" );
document.write( "Finance Charge = <font color=red>PhP 2,625</font><BR>\n" );
document.write( "Monthly Payment = <font color=red>PhP 2,376.25</font><BR>\n" );
document.write( "APR = <font color=red>10%</font><BR>\n" );
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