Joe has taken out a time payment plan to buy a car for k5,640. He pays a deposit of k1,640 and 18 monthly payments of k300. Find the flat rate of interest
To find the flat rate of interest, we need to calculate the total amount that Joe will pay over the 18-month period.
Total amount paid = Deposit + (Monthly payment x Number of months)
Total amount paid = 1640 + (300 x 18)
Total amount paid = 1640 + 5400
Total amount paid = 7040
Now, we can calculate the flat rate of interest using the formula:
Flat rate of interest = (Total amount paid - Principal amount) / Principal amount x 100
Flat rate of interest = (7040 - 5640) / 5640 x 100
Flat rate of interest = 1400 / 5640 x 100
Flat rate of interest = 0.2482 x 100
Flat rate of interest = 24.82%
Therefore, the flat rate of interest for Joe's time payment plan for buying the car is 24.82%.