Joe has taken out a time payment plan to buy a stereo for K2500. He pays a deposit of K300 and the contract requires 18 monthly payments of K150.

Question

Find the flat rate interest charged.

Answer 1

To find the flat rate interest charged, we can calculate the total amount Joe will pay over the 18-month period and subtract the initial principal amount.

Total amount paid = deposit + monthly payments
Total amount paid = K300 + 18 * K150
Total amount paid = K300 + K2700
Total amount paid = K3000

Now, we can calculate the flat rate interest charged:

Principal amount = K2500
Total amount paid = K3000

Interest charged = Total amount paid - Principal amount
Interest charged = K3000 - K2500
Interest charged = K500

Therefore, the flat rate interest charged is K500.

Answer 2

Flate interest in terms of percentage

Answer 3

To find the flat rate interest in terms of percentage, we can use the formula:

Flat rate interest = (Interest charged / Principal amount) * 100

Given:
Interest charged = K500
Principal amount = K2500

Flat rate interest = (K500 / K2500) * 100
Flat rate interest = (0.2) * 100
Flat rate interest = 20%

Therefore, the flat rate interest charged is 20%.