Posted by Jassie on .
The cash price of a speed boat is RM60,000. Under an installment plan, a buyer may pay a 30% down payment followed by monthly payments for 5 years. If the interest is 6% on the reducing balance, calculate
(i) the amount of interest using the constant ratio formula,
(ii) the monthly payment,
(iii) the installment price of the speed boat
Instalment purchases -
I am not familiar with some of the terms in your question, but ...
amount to be financed = 60000(.7) = 42000
let the payment be p
i = .06/12 = .005
n = 5(12) = 60
42000 = p (1 - 1.005)^-60)/.005
p = 811.98
The monthly payment is 811.98
See what you can do with that.