colleen purchases a piano for $8000.

Question

she puts 25% down and finances the rest at 3 3/4% for 48 equal monthly payments.

 

what is her down payment?

 

how much does she finance?

 

what is her monthly payment?

 

what does the piano really cost her? 

Answer 1

Down payment: 8000(.25) = $2,000

She finances $6,000

 

I = prt 

I = 6,000(.0375)(4) = $900 interest
 
She pays off 6900 in 48 equal payments
Monthly payments:  6900/48 = $143.75 per month

 

Final cost:  $8900

Answer 2

8000(.25) = $200 - down payment

8000-200 - $7800 - amount financed

i = prt      Time is always represented in years

i = 7800(.0375)(4) = $1170, amount of interest

monthly payment = 1170/48 = $24.375≈$24.38

8000+1170 = $9170 - total cost of piano