A washer-dryer combination can be purchased from a department store by making monthly credit card payments of $59.29 for three-and-a-half years. The first payment is due on the date of sale and interest is 16% compounded monthly. (a) What is the purchase price? (b) How much will be paid in installments? (c) How much is the cost of financing?
A washer-dryer combination can be purchased from a department store by making monthly credit card payments of $59.29 for three-and-a-half years. The first payment is due on the date of sale and interest is 16% compounded monthly. (a) What is the purchase price? (b) How much will be paid in installments? (c) How much is the cost of financing?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A washer-dryer combination can be purchased from a department store by making monthly credit card payments of $59.29 for
three-and-a-half years. The first payment is due on the date of sale and interest is 16% compounded monthly.
(a) What is the purchase price?
(b) How much will be paid in installments?
(c) How much is the cost of financing?
(d) If an additional $9.50 per month is added to cover a service contract, what is the value of the entire contract on the date of sale?
a) The purchase price is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
b) The amount paid in installments will be $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
c) The cost of financing is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
d) The value of the entire contract on the date of sale is S
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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