Chapter 8.3, Problem 20E

Applying What You’ve Learned

Financing a musical instrument. Walt is buying a music synthesizer for his rock band for $\$6,500$ . The music store is charging him an annual interest rate of $8.5\%$ and is using the add-on method to compute his monthly payments.

a. If Walt pays off the synthesizer in $24$ months, what are his monthly payments?

b. If he makes a down payment of $\$1,500$, how much will this reduce his monthly payments?

c. If he wants to have monthly payments of $\$150$, how large should his down payment be?