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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

David Sporn bought a saddle from Linville Western Gear with a 9.3% add-on interest installment loan. The purchase price of the saddle was $1,290. The loan required a 15 % down payment and equal monthly payments for 24 months.

a. What is the total deferred payment price of the saddle?

b. What are David’s monthly payments?

(a)

To determine

To calculate: The total deferred payment price and monthly payments if David Sporn bought a saddle from Linville Western Gear with a 9.3% add-on interest installment price. The purchase price of the saddle was $1,290. The down payment percent is 15% and equal monthly payments for 24 months.

Explanation

Given Information:

David Sporn bought a saddle from Linville Western Gear with a 9.3% add-on interest installment price. The purchase price of the saddle was $1,290. The down payment percent is 15% and equal monthly payments for 24 months.

Formula used:

The down payment is computed by multiplying down payment percent by the purchase price,

Down payment=Purchase Price×Down Payment Percent

The amount financed is computed by subtracting down payment from purchase price,

Amount financed=Purchase priceDown payment

The formula for the add-on interest finance charge is computed using I=PRT where I is interest or finance charge P is principal or amount financed, R is rate and T is time.

The total amount of installments payment is computed by adding finance charge with amount financed,

Total amount of installment payments=Amount financed+finance charge

Calculation:

Consider that purchase price is $1,290, down payment percent is 15%, add-on interest is 9.3% and number of payments is 24.

Compute down payment by substituting purchase price to $1,290 and down payment percent is 15%,

Down payment=Purchase Price×Down Payment Percent=1,290 × 0.15=$193.50

Hence, down payment is $193.50.

Compute amount financed by substituting purchase price to $1,290 and down payment to $193.50,

Amount financed=Purchase priceDown payment=1,290193

(b)

To determine

To calculate: The monthly payments if David Sporn bought a saddle from Linville Western Gear with a 9.3% add-on interest installment price. The purchase price of the saddle was $1,290. The down payment percent is 15% and equal monthly payments for 24 months. Total amount of installment payments is $1,300.45.

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Sect-13.I P-8RESect-13.I P-9RESect-13.I P-10RESect-13.I P-11RESect-13.I P-12RESect-13.I P-13RESect-13.I P-14RESect-13.I P-15RESect-13.I P-16RESect-13.I P-17RESect-13.I P-18RESect-13.II P-4TIESect-13.II P-5TIESect-13.II P-6TIESect-13.II P-7TIESect-13.II P-8TIESect-13.II P-9TIESect-13.II P-1RESect-13.II P-2RESect-13.II P-3RESect-13.II P-4RESect-13.II P-5RESect-13.II P-6RESect-13.II P-7RESect-13.II P-8RESect-13.II P-9RESect-13.II P-10RESect-13.II P-11RESect-13.II P-12RESect-13.II P-13RESect-13.II P-14RESect-13.II P-15RESect-13.II P-16RESect-13.II P-17RESect-13.II P-18RESect-13.II P-19RESect-13.II P-20RESect-13.II P-21RESect-13.II P-22RESect-13.II P-23RESect-13.II P-24RESect-13.II P-25RESect-13.II P-26RESect-13.II P-27RESect-13.II P-28RESect-13.II P-29RESect-13.II P-30RESect-13.II P-31RESect-13.II P-32RESect-13.II P-33RESect-13.II P-34RESect-13.II P-35RESect-13.II P-36RESect-13.II P-37RESect-13.II P-38RESect-13.II P-39RESect-13.II P-40RESect-13.II P-41RESect-13.II P-42RESect-13.II P-43RESect-13.II P-44RESect-13.II P-45RESect-13.II P-46RESect-13.II P-47RESect-13.II P-48RESect-13.II P-49RESect-13.II P-50RESect-13.II P-51RESect-13.II P-52RESect-13.II P-53RESect-13.II P-54RESect-13.II P-55RECh-13 P-1CRCh-13 P-2CRCh-13 P-3CRCh-13 P-4CRCh-13 P-5CRCh-13 P-6CRCh-13 P-7CRCh-13 P-8CRCh-13 P-9CRCh-13 P-10CRCh-13 P-11CRCh-13 P-12CRCh-13 P-13CRCh-13 P-14CRCh-13 P-1ATCh-13 P-2ATCh-13 P-3ATCh-13 P-4ATCh-13 P-5ATCh-13 P-6ATCh-13 P-7ATCh-13 P-8ATCh-13 P-9ATCh-13 P-10ATCh-13 P-11ATCh-13 P-12ATCh-13 P-13ATCh-13 P-14ATCh-13 P-15AT

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