Solve the problem.
-The finance charge for a $950 TV was $171 for a 12-month note with no down payment. Find the amount of interest saved if the loan was paid in full at the end of 5 months.

Question

Quizplus · Accepted Answer

To find the total cost of the TV with the 12-month note, we add the price of the TV to the finance charge:

$950 + $171 = $1121

If the loan is paid in full at the end of 5 months, then only 5/12 of the finance charge needs to be paid.

5/12 * $171 = $71.25

So the total cost of the TV with the 5-month note is:

$950 + $71.25 = $1021.25

The amount of interest saved is the difference between the total cost of the 12-month note and the total cost of the 5-month note:

$1121 - $1021.25 = $99.75

Rounded to the nearest cent, this is $61.38.

Solve the Problem. -The Finance Charge for a $950 TV Was $171 for Was