Question

Camerin wants a new big screen TV and home theater surround sound​ system, which he thinks will cost $ 4,300 The store will finance up to ​$3,800 for 2 years at a 18.75 percent interest rate. Assuming Camerin accepts the​ store's financing, what will his monthly payment​ be? If he increases his down payment to​ $1,000, how much will his monthly payment​ be? Complete both problems:

Answer 1

Loan Amount = $3,800

Time Period = 24 months

Interest Rate = 18.75%

Calculating Monthly Payment,

Using TVM Calculation,

PMT = [PV = 3800, V = 0, T = 24, I = 0.1875/12]

PMT = $191.09

So,

Monthly Payment = $191.09

If Down payment = $1,000

Loan Amount = $3,300

Calculating Monthly Payment,

Using TVM Calculation,

PMT = [PV = 3300, V = 0, T = 24, I = 0.1875/12]

PMT = $165.95

So,

Monthly Payment = $165.95