Question 754222: HEEELLLPPP! Please assist.
Karen and Wayne need to buy a refrigerator because theirs just broke. Unfortunately, their savings account is depleted, and they will need to borrow money in order to buy a new one. Sears offers them an installment loan at 16% (add-on rate). If the refrigerator at Sears costs $1,578 plus 5% sales tax, and Karen and Wayne plan to pay for the refrigerator for 3 years, what is the monthly payment.
Thank you.
Answer by rothauserc(4718)   (Show Source):
You can put this solution on YOUR website! Sears offers them an installment loan at 16% (add-on rate). If the refrigerator at Sears costs $1,578 plus 5% sales tax, and Karen and Wayne plan to pay for the refrigerator for 3 years, what is the monthly payment.
5% of $1578 is $78.90
total amount borrowed is 1578 + 78.90 = $1656.90
Sears charges 16% to borrow the money
16% of 1656.90 = 265.10
total amount is 1656.90 + 256.10 = $1913
there are 36 months in 3 years so
the monthly payment = 1913 / 36 = $53.14
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