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:
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-> 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:
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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):
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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.
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