To calculate the requested amounts, let's break it down into three parts:
(a) The total installment price
The total installment price is calculated by multiplying the monthly payment by the number of months:
\[ \text{Total Installment Price} = \text{Monthly Payment} \times \text{Number of Months} \]
Given:
- Monthly payment = $28
- Number of months = 24
\[ \text{Total Installment Price} = 28 \times 24 = 672 \]
Total Installment Price: $672
(b) The carrying charges
The carrying charges are calculated by subtracting the cash price from the total installment price:
\[ \text{Carrying Charges} = \text{Total Installment Price} - \text{Cash Price} \]
Given:
- Total Installment Price = $672
- Cash Price = $500
\[ \text{Carrying Charges} = 672 - 500 = 172 \]
Carrying Charges: $172
(c) The number of months needed to save the money at the monthly rate
To determine how many months are needed to save the cash price of the bicycle ($500) at the monthly payment of $28, we divide the cash price by the monthly saving amount:
\[ \text{Number of Months} = \frac{\text{Cash Price}}{\text{Monthly Saving}} \]
Given:
- Cash Price = $500
- Monthly Saving = $28
\[ \text{Number of Months} = \frac{500}{28} \approx 17.8571 \]
Since we need to round up to the nearest whole number:
\[ \text{Number of Months} = \lceil 17.8571 \rceil = 18 \]
Number of Months: 18
Summary of Results:
(a) Total installment price: $672
(b) Carrying charges: $172
(c) Number of months needed to save: 18
4 answers