You have purchased a home entertainment system for 6000 You

You have purchased a home entertainment system for $6000. You have agreed to pay off the system in 36 monthly payments of $194.42. What will be the total sum of your payments? What will be the total amount of interest that you will have paid? What is the percent of interest based on the price of the entertainment system? Explain.

Solution

so given that system actual cost is = 6000$

and no.of months to be paid = 36

montly instalment = $194.42

so total amount paid after paying off all the 36 instalments = 36* 194.42

= $6999.12

total amount paid as an interest is = 6999.12 - 6000

= 999.12 $

interest paid = [(paid amount - actual amount) / actual amount]*100

= [(6999.12- 6000) / 6000]*100

= 16.652 %

interest paid for 6000$ is = 16.652%