Virginia Osterman bought a television set on a 12-month installment plan that included a $70.20 finance charge and called for payments of $94 per month. If she decided to pay the full balance at the end of the eighth month, find the following. (a) the interest refund $ (b) the amount needed to pay off the loan $
Virginia Osterman bought a television set on a 12-month installment plan that included a $70.20 finance charge and called for payments of $94 per month. If she decided to pay the full balance at the end of the eighth month, find the following. (a) the interest refund $ (b) the amount needed to pay off the loan $
Chapter2: Solving Linear Equations
Section2.2: Use A Problem Solving Strategy
Problem 2.53TI: Eduardo noticed that his new car loan papers stated that with a 7.5% simple interest rate, he would...
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Transcribed Image Text:Virginia Osterman bought a television set on a 12-month installment plan that included a $70.20 finance charge and called for payments
of $94 per month. If she decided to pay the full balance at the end of the eighth month, find the following.
(a) the interest refund
$
(b) the amount needed to pay off the loan
$
Expert Solution
Step 1
Given that: The total number of installments is 12 months, the Finance charge is $70.20, payment of $94 per month and paid at the 8month.
Interest refund is defined as the percentage of the interest collected on the loans which is refunded to those.
The formula used to calculate interest refund is,
where S is the sum rule and F is the finance charge.
The sum rule is calculated using the formula,
where n is the remaining number of payments.
The amount needed to pay off the loan is calculated by formula,
.
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