Answer to Question #286342 in Financial Math for Roci

Question #286342

A vending treasury is purchased for RM 2,800 in cash with RM 700 down payment and fourteen monthly payments. If the interest calculated is 10% per annum, using the fixed rate equation calculation find:


I. Total interest charged


Secondly. monthly payment


1
Expert's answer
2022-02-02T13:41:09-0500

Solution:

Amount need to borrow = 2800-700 = 2100

Monthly Rate "= \\dfrac{10\\%}{12} = 0.8333\\%"

Monthly Payment "= \\dfrac{Amount\\ need\\ to\\ borrow}{\\dfrac{1-(1+r)^{-n}}r}"

"= \\dfrac{2100}{\\dfrac{1-(1+0.8333\\%)^{-14}}{0.8333\\%}}"

=$159.54

Total interest charged = Amount to be paid in total - Amount Borrowed

"=14\\times159.54-2100"

=$133.60

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