Question

Assume you buy $8000 worth of furniture with 6.5%add on interest for 10 years, what will be your monthly payments?

Answer 1

Answer:

$110

Explanation:

Cost of the furniture = $8,000

Add-On Interest = 6.5%

$\begin{gathered} Interest=Principal\times Rate\times\text{Duration} \\ =8000\times6.5\%\text{ }\times10 \\ =0.065\times8000\times10 \\ =5200 \end{gathered}$

Add 520 to the principal.

$\text{Amount Payable=8000+5200=13,20}0$

Since the repayment is to be made over 10 years:

$\text{Monthly Payment}=\frac{13,200}{10\times12}=\ 110$

The monthly payments will be $110.