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Maria and John decide to shop for furnishings for the new house.  They choose items that amount to $5600.00.  The store has 2 fixed installment simple interest loan options for purchasing:   Option 1: 20% down payment

Maria and John decide to shop for furnishings for the new house.  They choose items that amount to $5600.00.  The store has 2 fixed installment simple interest loan options for purchasing:   Option 1: 20% down payment

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter17: Accounting For Notes And Interest
Section: Chapter Questions
Problem 1MYW
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Maria and John decide to shop for furnishings for the new house.  They choose items that amount to $5600.00.  The store has 2 fixed installment simple interest loan options for purchasing:

 

Option 1: 20% down payment and financing at 5% simple interest per year for 3 years.

What is the finance charge/interest be? Show the work

 

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