   Chapter 13.II, Problem 4RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

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

# Calculate the amount financed, the finance charge, and the total deferred payment price for the following installment loans.Purchase Total(Cash) Down Amount Monthly Number of Finance DeferredPrice Payment Financed Payment Payments Charge PaymentPrice$2,900 0 _______$187.69 18 _______ _______

To determine

To calculate: The amount financed, the finance charge and the total deferred payment price for the installment where purchase price is $2,900, down payment is 0, monthly payment is$187.69 and number of payments are 18.

Explanation

Given Information:

The amount of purchase price is $2,900, down payment is 0, monthly payment is$187.69 and number of payments are 18.

Formula used:

The formula to compute amount financed is,

Amount financed=Purchase priceDown payment

The formula to compute total amount of installments payment is,

Total amount of installment payments=Monthly payment amount×Number of monthly payments

The formula to compute finance charge is,

Finance charge=Total amount of installment paymentsAmount financed

The formula to compute total deferred payment price is,

Total deferred payment price=Total amount of installment payments+Down payment

Calculation:

Consider that purchase price is $2,900, down payment is 0, monthly payment is$187.69 and number of payments are 18.

Compute amount financed by substituting purchase price equals to $2,900 and down payment equals to 0, Amount financed=Purchase priceDown payment=$2,9000=$2,900 Hence, amount financed is$2,900.

Compute total amount of installment payments by substituting monthly payment equals to \$187

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