The interest due on financing option is $307.50
What is interest on financing?
Interest on financing is the extra amount paid by the couple when their total payments are compared to the cash price of $6,230.
The total payments would be the 25% down payment plus the sum of the twelve monthly payments of $415 each
Down payment=cash price*25%
Down payment=$6230*25%
Down payment=$1,557.50
Total monthly payments=amount of each monthly payment*number of monthly payments
monthly payment=$415
number of monthly payments=12
Total monthly payments=$415*12
Total monthly payments=$4,980
Total payment under financing=Down payment +Total monthly payments
Total payment under financing=$1,557.50+$4,980
Total payment under financing=$6,537.50
Interest=$6,537.50-$6,230
Interest on financing=$307.50
Find out more on down payment on: brainly.com/question/1698287.
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Complete question:
Mr. and Mrs. Chan want to buy new furniture that has a cash price of $6230. On the installment plan, they must pay %25 of the cash price as a down payment and make twelve monthly payments of $415. How much interest did they pay due to financing?
