Sam received a $290 discount loan to purchase a stereo. The loan was offered at 16% for 90 days. Find the interest in dollars and the proceeds for the following problem.
The interest is $12.60, $11.60, or $10.60 ?
The proceeds are $279.40, $278.40, or $277.40 ?
Curtis purchased a mountain for $650.00 with 75% down. He will make 12 payments of $24.38 each. What is the total amount paid (including down payment) and finance charge in dollars?
The total paid (including down payment) is $781.06, $751.62 or $749.62
The finance charge in dollars is $131.06, $121.62, or $111.62
Thanks much
To find the interest in dollars and the proceeds for the first problem, we can use the formula:
Interest = Principal * Rate * Time
Where:
Principal = Loan amount
Rate = Interest rate
Time = Number of days/365 (assuming a year has 365 days)
In this case, the principal is $290, the rate is 16%, and the time is 90/365.
Interest = $290 * 0.16 * (90/365)
Interest ≈ $11.60 (rounded to the nearest cent)
To find the proceeds, we subtract the interest from the loan amount:
Proceeds = Loan amount - Interest
Proceeds = $290 - $11.60
Proceeds ≈ $278.40 (rounded to the nearest cent)
So, the interest in dollars is $11.60 and the proceeds are $278.40.
Moving on to the second problem, to find the total amount paid (including the down payment), we need to add the down payment to the sum of all the payments. The down payment is 75% of $650.
Down Payment = 0.75 * $650
Down Payment = $487.50
Now, let's calculate the total amount paid:
Total Paid = Down Payment + (Number of Payments * Payment Amount)
Total Paid = $487.50 + (12 * $24.38)
Total Paid = $487.50 + $292.56
Total Paid ≈ $780.06 (rounded to the nearest cent)
Therefore, the total amount paid (including the down payment) is $781.06.
To find the finance charge in dollars, we need to subtract the initial purchase price from the total amount paid:
Finance Charge = Total Paid - Purchase Price
Finance Charge = $781.06 - $650.00
Finance Charge ≈ $131.06 (rounded to the nearest cent)
Hence, the finance charge in dollars is $131.06.