Peggy made a down payment of $300 toward the purchase of new furniture. To pay the balance of the purchase price, she has secured a loan from her bank at 9%/year compounded monthly. Under the terms o her finance agreement, she is required to make payments of $77.32 at the end of each month for 60 months. What was the purchase price of the furniture? (Round your answer to the nearest cent.)

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.