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Z Snow-House sells a $1,980 snow thrower on the installment plan. The installment agreement
includes a 20% down payment and 12 monthly payments of $161 each.
a. How much is the down payment?
b. What is the total amount of the monthly payments?
c. What is the total cost of the snow thrower on the installment plan?
d. What is the finance charge?
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The breakdown of the payment made for the installment plan for the purchase made is :

  • Down payment = $396
  • Total monthly payment = $1932
  • Tital cost of installment plan = $2328
  • Finabce charge = $348

Given the Parameters.

  • Original cost = $1980
  • Down payment = 20% of original costs
  • Monthly installment = $161
  • Number of installment payments made = 12

1.) The down payment :

Percentage × original cost

20% × $1980 = $396

2.) Total monthly payments made :

Number of payments × amount per installment

12 × $161 = $1932

3.) Total cost of installment plan :

Total monthly payments + down payment

$(1932 + 396) = $2328

4.) Finance charge :

Installment plan - Original cost

$2328 - $1980 = $348

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