Peter buys AC at 900. He pays 20% deposit and the outstanding balance plus interest in 48 months. Interest on the balance is charged 10%. Find the amount he saves by paying cash

Answer 1

100% - 20% = 80% = 0.80.

Po = 0.80 * 900 = $720 = Amt. financed.

P = Po + Po*r*t.
P = 720 + 720*(0.1/12)*48 = $1008.

1008 - 900 = $108 = Amt. saved by paying cash.

Answer 2

Correction:
Total cost = 1008 + 180 = $1188.

1188-900 = $288. = Amt. saved by paying cash.