A diamond ring sells for $3400

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A diamond ring sells for $3400. To finance the ring throught the jewelry store, a down payment of 20% and a monthly payment of $84.50 per month for 36 months is required.


How much money will the purchaser borrow?

What finance charge will the individual pay the bank?

Answer?

The down payment is 20% of $3400 = $680.
The amount financed is $3400 - $680 = $2720
Total payments is 36*($84.50) = $3042
Finance charge is $3042 - $2720 = $322
 
Magical_Star said:
A diamond ring sells for $3400. To finance the ring throught the jewelry store, a down payment of 20% and a monthly payment of $84.50 per month for 36 months is required.


How much money will the purchaser borrow?

What finance charge will the individual pay the bank?
Answer?

The down payment is 20% of $3400 = $680.
The amount financed is $3400 - $680 = $2720
Total payments is 36*($84.50) = $3042
Finance charge is $3042 - $2720 = $322
Click to expand...

Your answers are correct - as I interpret the question.

The question is somewhat ambiguous - because the purchaser may borrow any amount that s/he wishes and the bank is willing lend (depending on the credit rating).
 
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