To find the finance charge, we first need to calculate the total amount paid over the installment plan and then subtract the original price of the TV.
1. Down payment:
- 10% of $1000 = $100
2. Monthly payments:
- 24 monthly payments of $40 each
- Total monthly payments = 24 * $40 = $960
Now, let's calculate the total amount paid over the installment plan:
- Total payments = Down payment + Monthly payments
- Total payments = $100 + $960 = $1060
The finance charge is the difference between the total amount paid and the original price of the TV:
- Finance charge = Total payments - Original price
- Finance charge = $1060 - $1000 = $60
Therefore, the finance charge for this installment plan is $60.
Answer:
$60
Step-by-step explanation:
To calculate the finance charge, we need to determine the total amount paid over the installment plan and subtract the initial cost of the TV.
Down payment: 10% of $1000 = $100.
Monthly payments: $40 for 24 months = $40 * 24 = $960.
Now, let's calculate the total amount paid over the installment plan:
Monthly payments
Total amount paid=Down payment+Monthly payments
= $100 + $960 = $1060
To find the finance charge, we subtract the initial cost of the TV from the total amount paid:
Finance charge
Total amount paid
Initial cost of TV
Finance charge=Total amount paid−Initial cost of TV} = $1060 - $1000 = $60
Therefore, the finance charge for buying the TV using the installment plan is $60.
