Levi would like to use a credit card to make a $3000 purchase. He is considering two credit options. The first requires a down payment of $1000 followed by monthly payments of $125. The second requires a down payment of $1300 followed by monthly payments of $110. The two options accumulate the same amount of interest and require the same number of monthly payments. What is the amount of interest for this loan?

Question

Kristen

Mathematics

21 April, 06:02

Levi would like to use a credit card to make a $3000 purchase. He is considering two credit options. The first requires a down payment of $1000 followed by monthly payments of $125. The second requires a down payment of $1300 followed by monthly payments of $110. The two options accumulate the same amount of interest and require the same number of monthly payments. What is the amount of interest for this loan?

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Answers (1)

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Craig Mann · Answer 1

Answer: $500

Step-by-step explanation:

Hi, since both credit options accumulate the same amount of interest:

1000+125x=1300+110x

Solving for x (number of months)

125x-110x = 1300-1000

15x = 300

x = 300/15

x = 20 months

Replacing x = 25 in one equation:

1000+125x =

1000+125 (20) =

1000+2500 = $3500

Finally, we have to subtract the amount of the purchase (3000) to the result obtained:

3500-3000=$500

Feel free to ask for more if needed or if you did not understand something.