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21 September, 20:21

Chiara purchased a new natural gas barbecue for $2,100 and made a down payment that was 30% of the purchase price. She financed the remaining balance for 9 months at an annual interest rate of 5.5% compounded monthly. What is Chiara's monthly payment (in dollars) ? (Enter a number. Round your answer to the nearest cent.)

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  1. 21 September, 20:48
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    Answer: Chiara's monthly payment is $194.7

    Step-by-step explanation:

    The cost of the new natural gas barbecue for $2,100. She made a down payment 30% off the purchase price. This means that the amount of down payment made is

    30/100 * 2100 = 0.3 * 2100 = $630

    Amount left to pay would be

    2100 - 630 = $1470

    The formula for determining monthly loan payment is

    A = P (r (1 + r) ^n) / ((1 + r) ^n - 1)

    There would be 9 monthly payments, so

    n = 9

    r = 0.055/12 = 0.0046

    P = 1470

    A = 1470 (0.0046 (1 + 0.0046) ^9) / ((1 + 0.0046) ^9 - 1)

    A = (1470 * 0.0049) / 0.037

    A = 7.203/0.037

    A = 194.67
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