The cash price of a car is $25000. A customer paid deposits $ 3750. He repaid the amount owing in 24 equal monthly installments. If he was charged simple interest at the rate of 40% p.a, how much was each installment.
25000 – 3750
= 21250
21250 × 0.4 × 24/12
=38250
Installment = 38250/24
= 1,593.75
5 answers
Are you sure it was 40% interest rate? I believe that is illegal.
it was 4%
No. Rework the problem, making sure that you state the interest rate as 0.04
21250 + 21250 * 0.04 * 24/12
=22950
22950/24
= 956.25
=22950
22950/24
= 956.25
Yes. The monthly installment is $956.25
0 answers