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An item is purchased for​ $2500 with a down payment of​ $500. There is a finance charge of$ 150Find the monthly payment if 20 payments are made. Round the answer to the nearest cent.

Question

An item is purchased for​ $2500 with a down payment of​ $500. There is a finance charge of

$ 150

Find the monthly payment if 20 payments are made. Round the answer to the nearest cent.

check_circleAnswer
Step 1

Purchase Price = $2,500

Down Payment = $500

 

Calculation of Loan Amount (PV):

Loan Amount (PV) = Purchase Price - Down Payment
=$2,500-$500
= $2, 000
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Loan Amount (PV) = Purchase Price - Down Payment =$2,500-$500 = $2, 000

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Step 2

Loan Amount = $2,000

Finance Charge = $150

 

Calculation of Interest Rate:

Interest Rate Finance Charge100
Loan Amount
$150
x 100
$2,000
= 7.5%
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Interest Rate Finance Charge100 Loan Amount $150 x 100 $2,000 = 7.5%

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Step 3

Loan Amount (PV) = $2,000

Interest rate (rate) = 7.5%

Number of Payments (nper) = 20

 

Calculation of monthly installments us...

-РМТО
PMT(rate, nper, pv, [fv], [type])
|=PMT(7.5%,20,-2000)
$196.18
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-РМТО PMT(rate, nper, pv, [fv], [type]) |=PMT(7.5%,20,-2000) $196.18

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