Question

Karen and Wayne need to buy a refrigerator because theirs just broke. Unfortunately, their savings account is depleted, and they will need to borrow money in order to buy a new one. Sears offers them an installment loan at 13% (add-on rate). If the refrigerator at Sears costs $1,598 plus 5% sales tax, and Karen and Wayne plan to pay for the refrigerator for 3 years, what is the monthly payment?

Answer 1

Ridiculous! They shouldn't be buying such an expensive refrigerator when they don't have much money and have to borrow at a high interest rate.. Sears sells good refrigerators at one-third that price.

1598 * 1.05 = $16,779 total price

I = PRT
I = 16,779 * 0.13 * 3 = 6,543.81

(16,779 + 6,543.81) / 36 = ________ monthly payment