Question

A bough $10,376 furniture. She paid $1500 down and pay the balance 5.1% add-on rate for 2 years. What is monthly payment and what is the total cost of the purchase, including finance charges.

Answer 1

1)	Loan Amount	8876
	Interest rate per period	0.00425
	Number of periods	24
	EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
	Where,
	EMI= Equal Monthly Payment
	P= Loan Amount
	R= Interest rate per period
	N= Number of periods
	= [ $8876x0.004 x (1+0.004)^24]/[(1+0.004)^24 -1]
	= [ $37.723( 1.004 )^24] / [(1.004 )^24 -1
	=$389.800
2)	Total Cost = ($389.80*24)+1500
	=$10855.20