Question

Choose the correct answers for (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 for its cash price.

living room furniture with a cash price of $2,900 at $100.00 down and $89.50 per month for 36 months
a)
b)
c)

Answer 1

A
100+89.50×36
=3,322
b
3,322−2,900
=422
c
2,900÷89.50
=33

Answer 2

a) $3322

b) $422

c) 33 months

Explanation:

We are given : Cash price = $2900 , Downpayment = $89.50 , No. of months = 36

a)

`\text{Total installment price}=downpayment+(\text{monthly installment}*\text{no. of months})\\\\\text{Total installment price}=100+(89.50* 36)\approx\$3322`

b)

`\text{Carrying charges}=\text{total installment price}-\text{cash price}\\\text{Total carrying charges}=3322-2900=\$422`

c)

`\text{No. of months needed to save the money to buy the item at cash price}=\frac{\text{Cash Price}}{\text{No. of months}} \\\\=(2900)/(89.50)\approx32.40\approx33\thinspace months`