posted by arzam on .
The cash price for a car was $7640. Gurtaj bought the car on the following terms : A deposit of 20% of the cash price and 36 monthly payments of $191.60 . Calculate the total amount Gurtaj paid.
According to actuarial math, where interest is considered, he paid $7640, (you cannot simply add "monies" that are in different time slots on a time graph.
e.g. Making $40,000 in 1985 ≠ $40,000 in 2013
If you ignore interest the total he paid
= .2(7640) + 36(191.60) = $8425.60
A more interesting question would have been to find the interest rate per annum compounded monthly that he was charged.
Thanks. It helped me for my exam!