Hi sorry i don't know if there's a reply function in this website (there should be).
So for the info, it's:
-Item: $5800
-Down payment: $600
-Finance charge: 7%
-12 months to pay
-Not sure if compound interest but I'd assume if that's how installments work.
Looking for:
-loan amount
-monthly payment
-total cost
So after the downpayment, the present value of your loan is 5200
i = .07/12 = .0058333...
n = 12
payment ---- p
p( 1 - 1.0058333..^-12)/.0058333.. = 5200
solve for p, I will let you do the button-pushing,
let me know what you get.
Once you have p, I am sure you know how to answer the last part.
Btw, there is a response method, I am using it right now,
it is called "Respond to this Question"
Ok i didn't know if you'd be alerted to this since its me responding to my own question. And thank you
Reiny I got something wild. 13,237,541.9906
No idea how you got that absurd number ....
p( 1 - 1.0058333..^-12)/.0058333.. = 5200
p(1 - .9325834..)/.0058333.. = 5200
p(.067416..)/.00583333... = 5200
p(11.22712...) = 5200
p = 449.99
the .... after each number shows that I kept all decimals in my calculator
as I did my arithmetic.
I did this by storing the full results in the calculator's memory, I use an 25-year old
SHARP scientific calculator which has 7 memory registers.
Thank you very much. Web2.0calc isn't really what it's cracked up to be
To calculate the loan amount, monthly payment, and total cost, we need to consider the down payment and the finance charge. Here's how you can calculate each component:
1. Loan Amount:
The loan amount is the difference between the item price and the down payment. In this case, the loan amount would be ($5800 - $600) = $5200.
2. Monthly Payment:
To calculate the monthly payment, we need to consider the loan amount, finance charge, and the number of months to pay. We can use a loan repayment formula.
The formula to calculate the monthly payment is:
M = (P * r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
M = Monthly Payment
P = Loan Amount
r = Monthly Interest Rate
n = Number of Months to Pay
The finance charge is 7%, which needs to be converted to a monthly interest rate. We can divide the annual rate by 12 to get the monthly interest rate: (7% / 12) = 0.5833%.
Using the formula, we can calculate the monthly payment:
M = ($5200 * 0.5833% * (1 + 0.5833%)^12) / ((1 + 0.5833%)^12 - 1)
Calculating this equation will give you the monthly payment.
3. Total Cost:
The total cost is the sum of the loan amount and the total finance charge. To calculate the finance charge, multiply the loan amount by the finance rate (7%). Then add this finance charge to the loan amount.
Total Cost = Loan Amount + Finance Charge
By applying the formula mentioned above, you can calculate the total cost.
Please note that this calculation assumes compound interest, which is typical for installment payments. However, it's always a good idea to confirm with your lender or financial institution to determine the specific terms of your loan.