Example 1:
Heather wants to purchase an electric guitar. The price of the guitar with tax is $2,240. She speaks to the salesperson at the music store who suggests that she buy the guitar on the installment plan. It requires a 15% down payment. The remainder, plus an additional finance charge, is paid back on a monthly basis for the next two years. The monthly payment is $88.75.
a. How much is the down payment?
b. What is the sum of the monthly payment?
c. What is the total cost?
d. How much is the finance charge?