To calculate the monthly payment for the refrigerator, we first need to find the total amount borrowed, which is the cost of the refrigerator plus the sales tax.
Cost of refrigerator = $1,598
Sales tax = 5% of $1,598 = $79.90
Total amount borrowed = $1,598 + $79.90 = $1,677.90
Next, we need to calculate the total interest paid over the loan term. The add-on rate of 14% is calculated on the total amount borrowed, and the loan term is 3 years.
Total interest paid = Total amount borrowed x add-on rate x loan term
Total interest paid = $1,677.90 x 0.14 x 3 = $702.94
Now, we can calculate the total amount repaid over the loan term, which is the sum of the total amount borrowed and the total interest paid.
Total amount repaid = Total amount borrowed + Total interest paid
Total amount repaid = $1,677.90 + $702.94 = $2,380.84
Finally, we can calculate the monthly payment by dividing the total amount repaid by the number of months in the loan term (3 years = 36 months).
Monthly payment = Total amount repaid / Loan term in months
Monthly payment = $2,380.84 / 36 = $66.41 (rounded to the nearest cent)
Therefore, Karen and Wayne's monthly payment for the refrigerator is approximately $66.41.