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algebra application

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find the amount of interest and monthly payment for loan. Purchasing a living room set for $3,900 at 12% add-on interest for 2 years. (round monthly payment to the nearest cent)

  • algebra application -

    P = (Po*r*t) / (1-(1+r)^-t).

    r = 12% / 100% = 0.12 = APR expressed as a decimal.
    Po = $3900.
    t = 2 yrs.

    Plug the above values into the given Eq
    and get:

    P = $4406.08.
    Int. = P-Po = 4406.08 - 3900 = $506.08.
    Monthly = P/t=4406.08 / 24mo.= $183.59.

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