James purchased a lounge suite with a ticketed price of $5610. The lounge suite is purchased on terms of 20% deposit with the balance plus interest to be repaid over 4 years in equal monthly instalment with interest charged at a rate of 9%p.a.
So how much is he paying?
James purchased a lounge suite with a ticketed price of $5610. The lounge suite is purchased on terms of 20% deposit with the balance plus interest to be repaid over 4 years in equal monthly instalment with interest charged at a rate of 9%p.a.
So how much is he paying?
James paid $5610 for the lounge suite. But he put 20% down payment, which means that he put down .20 X $5620=$1,122.00. Now we subtract that from $5610 and we get.
$5610 - $1,122.00=$4,488.00, the balance that James owes.
If the of 9% is compounded annually then the monthly payments that James must make would be $110.94, which icludes principal plus intersest.That will pay off the loan of $4,488.00 in four years. Now $110.94 X 48 months(or four years)=$5325.12 - $4,488.00=$837.12 interest that James will have paid in four years.
If the interest rate of 9% is compounded monthly, then the monthly payment will be $111.68.
