document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1196132>Question 1196132</A>: <I><SPAN STYLE=\"word-break: break-all;\"> 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:<BR>\n" );
document.write( "1.1. how much did the car cost when John purchased it?<BR>\n" );
document.write( "1.2. how much interest does he pay? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #828920 by </B><A HREF=/tutors/aboutme.mpl?userid=math_tutor2020><B>math_tutor2020(3817)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=math_tutor2020><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=828920\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> <font color=black size=3><BR>\n" );
document.write( "L = loan amount = unknown<BR>\n" );
document.write( "P = monthly payment = 400<BR>\n" );
document.write( "i = monthly interest rate = 0.24/12 = 0.02<BR>\n" );
document.write( "n = number of months = 24\r<BR>\n" );
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document.write( "Use those values in the monthly payment formula to solve for L<BR>\n" );
document.write( "P = (L*i)/(1 - (1+i)^(-n))<BR>\n" );
document.write( "400 = (L*0.02)/(1 - (1+0.02)^(-24))<BR>\n" );
document.write( "400 = (0.02L)/(0.37827851206116)<BR>\n" );
document.write( "0.02L = 0.37827851206116*400<BR>\n" );
document.write( "0.02L = 151.311404824464<BR>\n" );
document.write( "L = 151.311404824464/0.02<BR>\n" );
document.write( "L = 7565.5702412232<BR>\n" );
document.write( "L = 7565.57<BR>\n" );
document.write( "This is the loan amount.\r<BR>\n" );
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document.write( "John made a down payment of R3000<BR>\n" );
document.write( "He is loaned R7565.57 to pay the remaining cost of the car.\r<BR>\n" );
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document.write( "The price of the car is 3000+7565.57 = <font color=red>R10,565.57</font>\r<BR>\n" );
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document.write( "John makes 24 payments of R400 each<BR>\n" );
document.write( "He pays a total of 24*400 = R9600<BR>\n" );
document.write( "This total consists of principal (the amount he was loaned) and interest. \r<BR>\n" );
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document.write( "Subtract off the loan amount to find the interest<BR>\n" );
document.write( "9600 - 7565.57 = <font color=red>R2034.43</font> is the interest.\r<BR>\n" );
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document.write( "The down payment is NOT part of this calculation. <BR>\n" );
document.write( "As far as the bank is concerned, the car costs R7565.57\r<BR>\n" );
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document.write( "<font color=red>Answers:</font><BR>\n" );
document.write( "The price of the car is <font color=red>R10,565.57</font><BR>\n" );
document.write( "The total interest paid is <font color=red>R2034.43</font><BR>\n" );
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