Question

Calculate (a) the total installment price, (b) the carrying charges, and (c) the number of months needed to save the money at the monthly rate to buy the item below for its cash price (remember to round up). A computer with a cash price of $750, offered on the installment plan for $39 per month for 24 months. a. $ a0 b. $ a1 c. a2

Answer 1

• a) $936
• b) $186
• c) 19.23 or 20 months

Explanation:

(a) $39 for 24 months comes to ...

$39 × 24 = $936

(b) The "carrying charges" are the difference between the cash price and the installment price:

$936 -750 = $186

(c) Saving at the rate of $39 per month, it would take ...

$750/$39 = 19.23 . . . . months

about 20 months to save up the cash price.

Often, such savings would come from a once-a-month paycheck, so it would take more than 19 such paychecks to save the required amount.