Maths Made Easy Forums Standard Budgeting & Expenses Vehicle Expenses

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      Keymaster
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      Shakira buys a second-hand car for $5000. She pays a $2000 cash deposit and borrows the balance from her parents. She agrees to pay her parents $100 each month for 3 years.
      a. Calculate the total amount Shakira pays to her parents.
      b. How much interest does she pay?
      c. Find the annual flat rate of interest charged by Shakira’s parents.

      a. Repayments = 100 × 36
      = $3600

      b. Total paid for the car = 2000 + 3600
      = $5600
      Interest = $5600 – $5000 = $600

      c. Interest rate = interest/loan × 100
      = 600/3000 × 100 = 20%

      20% for 3 years
      20 ÷ 3 = 62/3% pa

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