Highschool Financial Algebra:

Example 3 Carpet King is trying to increase sales, and it has instituted a new promotion. All purchases can be paid on the installment plan with no interest, as long as the total is paid in full within six months. There is a $20 minimum monthly payment required. If the Schuster family buys carpeting for $2,134 and makes only the minimum payment for five months, how much will they have to pay in the sixth month? Check Your Understanding 3 Layaway plan you don't get it until you pay. Scott'purchased a $1,200 bed on a 5-month layaway plan and had to pay a monthly payment of $260. What is the sum of the monthly payments? What was the fee charged for the layaway plan? Exa m pl e 4 Deferred payment similar to installment but with low monthly payments. Mark purchases an engagement ring for $6,899. He has a twoyear, no interest, no money down, deferred payment plan. He does have to make a $100 monthly payment for the first 23 months. a. What is the sum of these monthly payments? b. How much must he pay in the last month of this plan? Check Your Understanding 4 Carson purchases a living room furniture set for $4,345. He has a one-year, no interest, no money down, deferred payment plan. He has to make a $15 monthly payment for the first 11 months. a. What is the sum of these monthly payments? b. How much must he pay in the last month of this plan? Example 5 Mike has a credit rating of 720. Tyler has a credit rating of 560. Mike and Tyler apply for identical loans from Park Bank. Mike is approved for a loan at 5.2% interest, and Tyler is approved for a loan that charged 3 percentage points higher because of his inferior credit rating. a. What interest rate is Tyler charged? b. Let's take Mike and Tyler's rates and apply it to a $3,000 loan to be paid back over 3 years. Use the simple interest formula. Check Your Understanding 5 Trisha has a credit line of $10,000. She had a previous balance of $752.65 and made a payment of $1,000. Her total purchases are $2,297.81, and she has been charged a $15 finance charge. What is her available credit