Homework Help: Instalment purchases

Posted by Jassie on Saturday, December 1, 2012 at 6:49am.

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 - Reiny, Saturday, December 1, 2012 at 10:53am
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.

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