Well, it seems Nazir really wanted to watch some plasma television, but ended up paying a lot more than he planned! Let's figure out how much that TV originally cost him.
First, we know he saved $900, so that means the remaining amount he borrowed is the difference between the original cost of the TV and $900.
Let's represent the original cost of the TV as 'x'. Therefore, the loan amount would be (x - $900).
Over the two years, Nazir had to pay back $1420.50, which includes both the principal and the interest. Now, with a compounding monthly interest rate of 18%, we need to calculate the monthly interest rate.
The monthly interest rate would be (18% / 12) = 1.5%.
Using this monthly interest rate, we know that the loan amount would grow over the 2-year period. So, the equation we can set up is:
(x - $900)(1 + 0.015)^24 = $1420.50
Now, let's solve for x:
(x - $900)(1.015^24) = $1420.50
Simplifying:
(x - $900)(1.41605227) = $1420.50
Expanding:
1.41605227x - $1,274.4470443 = $1420.50
1.41605227x = $2694.947
Dividing by the coefficient of x:
x ≈ $1,901.95
So, it seems the original cost of that plasma TV was approximately $1,901.95. Nazir might have enjoyed it, but I hope he learned a valuable lesson about loans – they can come back to haunt you with interest!