11 Liz purchases a hot tub costing $5,500 by taking out a 13% add-on interest installment...
11 Liz purchases a hot tub costing $5,500 by taking out a 13% add-on interest installment loan. The loan requires a 25% down payment and equal monthly payments for 4 years. How much are Liz's monthly payments?
Homework Answers
| Calculation of loan amount | |
| Cost of dining set | $5,500 |
| Down payment @ 25% | $1,375 |
| Loan amount | $4,125 |
| Calculation of monthly installment | |
| Monthly principal (4,125/48) | $85.94 |
| Total interest amount (4125*13%*4) | $2,145 |
| Monthly interest amount (2145/48) | $44.69 |
| Monthly installment (85.94+44.69) | $130.63 |
| Thus, monthly payments under loan would be $130.63 |
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