Question

Gary is buying a $1,250 computer on an installment plan. He makes a down payment of $150. He has to make monthly payments of 48.25 for 2 1/2 years. What is the total finance charge?

Answer 1

Explanation:

Down payment = $150

Monthly Payment = $48.5

Buyer price = $1250

Number of months = 30 (2 1/2 years)

The total amount of monthly payments = Monthly payments × Number of months

= 48.5 × 30

= 1447.50

The total cost = Total amount of monthly payments + Down payments

= 1447.50 + 150

= 1597.50

Finance charge = Total cost - Buyer price

= 1597.50 - 1250

= 347.50