# Stereo Inc. sells a stereo system for $600 down and monthly payments of $70 for the next

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## Question:

Stereo Inc. sells a stereo system for $600 down and monthly payments of $70 for the next 2 years. If the interest rate is 2.5% per month, find:

a) The cost of the stereo.

Answer = $ ________?

b) The total amount of interest paid.

Answer = $_________?

I thought the formula would be: $600 (1+2.5/12)^12*2 but now i'm not sure can you explain what I'm doing wrong to get to the right answer please