Jacob purchases camping equipment at a cost of $3,450 by taking out an 9% add-on installment loan. The loan requires a 10% down payment and equal monthly payments for 2 years. How much are Jacob's monthly payments?

Question

Quizplus · Accepted Answer

First, calculate the down payment: 10% of $3,450 = $345. So, the amount financed is $3,450 - $345 = $3,105. The total interest on the loan is 9% of $3,105 for 2 years = $3,105 * 0.09 * 2 = $558.90. The total amount to be repaid is $3,105 + $558.90 = $3,663.90. Dividing this by the number of months (24) gives the monthly payment: $3,663.90 / 24 = $152.66.

Jacob Purchases Camping Equipment at a Cost of $3,450 by Taking