Find the amount of interest and the monthly payment for the loan. Purchase a living room set for $3,800 at 12% add-on interest for 2 years. (Round your monthly payment to the nearest cent.)
Pt = Po + Po*r*t.
Pt = $3800 + 3800*0.12*2,
Pt = 3800 + 912 = $4712. = Amt. Pd.
I = Po*r*t = 3800*0.12*2 = $912.
Monthly = 4712 / 24mo. = $196.33.
To find the amount of interest and the monthly payment for the loan, we need to use the formula for add-on interest.
The formula for add-on interest is:
Total interest = Principal amount * Interest rate * Term
First, let's calculate the amount of interest:
Principal amount = $3,800
Interest rate = 12% (expressed as decimal 0.12)
Term = 2 years
Total interest = $3,800 * 0.12 * 2 = $912
Now, let's calculate the monthly payment:
To calculate the monthly payment, we need to divide the total financing amount (including interest) by the number of months.
Total financing amount = Principal amount + Total interest
Total financing amount = $3,800 + $912 = $4,712
Term = 2 years = 2 * 12 months = 24 months
Monthly payment = Total financing amount / Term
Monthly payment = $4,712 / 24 = $196.33
Therefore, the amount of interest for the loan is $912, and the monthly payment for the loan is $196.33 (rounded to the nearest cent).