PLEASE ANSWER THIS ONE:
QUESTION 2. You purchase a washing
machine for 50,000 pesos. You pay 30% down and agree to repay the
balance in 24 equal monthly payments. The finance charge on the
balance is 10% simple interest. (a) Find the finance charged. (b)
Estimate the annual percentage rate. Round to the nearest tenth of
a percent.
***Important note: The attached picture is for guidance
purposes; it is a sample problem to help you solve the
question
above and contains the expected method to be used in solving the
question.
- Please Answer This One Question 2 You Purchase A Washing Machine For 50 000 Pesos You Pay 30 Down And Agree To Repay 1 (84.47 KiB) Viewed 16 times
Example: Calculate a Finance Charge and an APR. You purchase a refrigerator for 33,750 pesos. You pay 20% down and agree to repay the balance in 12 equal monthly payments. The finance charge on the balance is 9% simple interest. (a) Find the finance charged. (b) Estimate the annual percentage rate. Round to the nearest tenth of a percent. Solution: (a) To find the finance charge, first calculate the down payment. Down Payment = percent down x purchase price So, the down payment is 0.20 x 33,750 = 6,750 pesos. Next, we determine the amount financed which is given by the formula Amount Financed = purchased price - downpayment So, the amount financed is equal to 33,750 -6,750 = 27,000 pesos. Finally, we determine the finance charged which is same as the interest owed. The interest owed is given by the formula Interest Owed = finance rate x amount financed So, the interest owed is equal to 0.09 x 27,000 = 2,430 pesos. Hence the finance charged is 2,430 pesos. (b) The annual percentage rate may be estimated using the formula 2nr APR n+1 where n is the number of payments and r is the simple interest rate. Hence, the annual percentage rate is approximately equal to ≈ 0.166 or 2(12)(0.09) 12+1 16.6%.