Question

Sheila bought a new computer for $2000 and has agreed to finance it at 12% interest, with $100 payments each month. When she makes her first payment next month, how much will she pay for interest alone?

Answer 1

Answer:

rate per month = .01 agreed = r

Luckily they only ask for the first month so it is 0.01 * 20 .

Later months get more complicated and it is like paying off a mortgage with the term unknown but the rate and payment known.

Payment = principal value [ r / {1-(1+r)^-n } ]

100 = 2000 [ .01 / {1 - (1.01)^-n } ]

5 = 1/ {1 - (1.01)^-n }

.2 = 1 - (1.01)^-n

.8 = 1.01^-n

log .8 = -n log 1.01

n = 22.4 months :)

so over the almost two years pay 2240 total :)

* Hopefully this helps:) Mark me the brainliest:)!!!