Joe has taken out a time payment plan to buy a car for k5,640. He pays a deposit of k1,640 and 18 monthly payments of k300. Find the flat rate of interest

Answer 1

To find the flat rate of interest, we need to calculate the total amount that Joe will pay over the 18-month period.

Total amount paid = Deposit + (Monthly payment x Number of months)
Total amount paid = 1640 + (300 x 18)
Total amount paid = 1640 + 5400
Total amount paid = 7040

Now, we can calculate the flat rate of interest using the formula:

Flat rate of interest = (Total amount paid - Principal amount) / Principal amount x 100
Flat rate of interest = (7040 - 5640) / 5640 x 100
Flat rate of interest = 1400 / 5640 x 100
Flat rate of interest = 0.2482 x 100
Flat rate of interest = 24.82%

Therefore, the flat rate of interest for Joe's time payment plan for buying the car is 24.82%.