Answer to Question #230248 in Financial Math for kent

Question

You buy items costing $

2300

and finance the cost with a fixed installment loan for

24

months at

5

% simple interest per year.

a.

What is the

finance charge?

b.

What

is

your monthly payment

Answer 1

a) finance charge= $\frac{PRT}{100}=\frac{2300\times 5\times 24/12}{100}=\$230$ (for 24months)

b) monthly payment $=\frac{2300}{24months}+\frac{230}{24months}=95.83+9.583=\$105.413$