Please help me with this question (1 Viewer)

[Emph]

Hi...

I am studying (well trying to) for my half yearlies and am finding it hard because i have only dropped to general this year and so missed three topics from last term. Credit and loans is screwing me over. I can get most of it... just this buying on terms stuff is making me mental. I am fine until I am asked to find the simple interest rate- i have not managed to get a single one right in the whole excercie. I am usually just out by a few numbers but EVERY SINGLE TIME!!!

Please just tell me where i am going wrong. I will write the questions and then my lines of working.

1)Del and barry bought an old cottage for $11000 and had it transported to their farm in the country. They paid the vendor 10% deposit and agreed to pay him the rest at $85 per week over 5yrs.
(A) How much did they actually pay for the house?
(B) What is the vendor's flat interest rate correct to 3 sig. fig?

(A) $11000-10%
=$9900 (therefore 1100 deposit)
$85 x 5 x 52
= $22100
$22100 + deposit
=$23200 (I am correct up to here according to book)

(B) $23200-$11000
=$22100 (I)
I=PRN
$22100 = $11000xRx5
$22100 = $55000R
R=0.40181818....
=40.2% pa (the answer is meant to be 24.6%)

2) Billy bought a new stereo system, cash price $999 and chose a deferred payment plan. He paid $20 deposit and his first payment of $60 was 3 months later. If he made 24 monthly repayments find...
(A) the total cost of the stereo
(B) the flat rate of interest charged (1dp)

(A) $20 + $60 x 24
=$1460 (correct)

(B) $1460 - $999
=$461 (I)
I = PRN
I = $461 P = $99-$20 n = 24
$461 = $979 x R x 24
$461 = $23496R
R= 0.0196203.....
R = 2.0%pa (answer is meant to be 20.9%)

3) Steve purchased an engagement ring and paid $100 down payment, no repayment for 6 months and then $60 a fortnight for 3yrs.
(A) How much more than the advertised price of $3000 did he pay?
(B) What was the flat rate of interest charged?

(A) $3000 - $100
= $2900
$60 x 26 x 3
= 4680
$4680 - $ 2900
=$1780 (correct)

(B) I = PRN
I = $1780 P = $2900 N = 3
$1780 = 2900 x R x 3
$1780 = 8700R
R = 0.204597...
R = 20.5%pa (meant to be 17.5%)

 

[_ShiFTy_]

I got 44.6% for 1 b), are u sure you didnt make a typo?
I think ur mistake here is that P=9900

For 2 b) , you forgot to convert weeks back to years, but you also didnt put the correct value of "n"... it is supposed to be 24+3 months, which is 2.25 years

Same for 3 b) "n" is 3 years + 6 months, which is 3.5 years

 

[XcarvengerX]

Question 1:

(B) $23200-$11000
=$22100 (I)

Check this line. You got it wrong here.
The I should be $12200, P should be 9900.

 

[_ShiFTy_]

Question 1:

Check this line. You got it wrong here.
The I should be $12200, P should be 9900.

woops, missed the mistake of the I

 

[kolgf]

Hello here are the answers to your questions ^_^:

1.
(B)11000(Principal)-1100(10% deposit)
=9900(P)
23200-11000
=$12200(Interest)= 9900xRx5
=$12200(Interest)= $49500
R=0.24646...(x100)
=24.6%

2.
(B) 999(Principal)-20(deposit)
=$979(P)
461(interest. How much he paid - the cash price($999))=979(Cash price - deposit)xRx2.25(24months+the 3 months he didnt pay)
461=2202.75
R=0.209283...(x100)
=20.9%

3.
(B) $1780 = 2900 x R x 3.5(this is were u went wrong u didnt plus the 6months, they r still part of his loan period)
1780=10150
R=0.175536...(x100)
=17.5%

I hope u get it ^_^

 

[PC]

Question 1

(a) Deposit = 10% of $11000 = 0.10 x 11000 = $1100
Payments = 85 x 52 x 5 = $22100
Total cost = Deposit + Payments = 1100 + 22100 = $23200

(b) Interest paid = 23200 – 11000 = 12200
Amount owing after deposit is paid = 11000 – 1100 = $9900

Now I = Prn
12200 = 9900 x r x 5
12200 = 49500r
r = 0.246464646
= 24.6%


Question 2

(a) Deposit = $20
Total payments = 24 x 60 = $1440
Total cost = deposit + payments = 20 + 1440 = $1460

(b) Interest paid = 1460 – 999 = $461
Amount owing after deposit = 999 – 20 = $979
Time to repay loan = 24 + 3 = 27 months = 2.25 years

Now I = Prn
461 = 979 x r x 2.25
461 = 2202.75r
r = 0.2092838497
= 20.9%


Question 3

(a) Deposit = $100
Total payments = 60 x 26 x 3 = $4680
Total cost = deposit + payments = 100 + 4680 = $4780
Extra amount paid = 4780 – 3000 = $1780

(b) Interest paid = $1780
Amount owing after deposit = 3000 – 100 = $2900
Time to repay loan = 3 years + 6 months = 3.5 years

Now I = Prn
1780 = 2900 x r x 3.5
1780 = 10150r
r = 0.1753694581
= 17.5%


Hope this helps!