On April 1, 2018, John Vaughn purchased appliances from the Acme Appliance Company for $1,200. In order toincrease sales, Acme allows customers to pay in installments and will defer any payments for six months. Johnwill make 18 equal monthly payments, beginning October 1, 2018. The annual interest rate implicit in this agreement is 24%.Required:Calculate the monthly payment necessary for John to pay for his purchases.

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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.