Puchasing by installment

 In this lesson we're going to learn purchasing by installment or buying on terms. This lesson will tell you how to pay the bill divided equally to pay every month. Everyday every person uses the monthly payment such as credit card bill, bank mortgage etc.

 To find the monthly payment, first is you have to find the deposit.
Second is find the balance owing.
Third is use the formula I = P x R x N / 100 
to find the interest on the balance.

Forth is find the total amount still owing. I.e Balance + interest.
Fifth is Divide the total amount owing by the number of months over it is repaid.


Also there are terms you guys must know.
1. Cash price: Amount of stuff is worth if it is paid immediately.
2. Deposit: Paying the part of the whole amount owing.
3. Balance: Amount of debt still owing after paying the part of it.
4. Monthly installment: Paying the part of the debt equally every month.

  For example "Roebuck bought a new car which the price is $35649. Roebuck pays a deposit 20% and agrees to pay the balance over 6 years at 22% p.a. What is his monthly installment?"

 We're going to do it by steps because we need to find the deposit, balance and interest on the balance.

1)  Find the deposit.
20% x $35649
= 20/100 x $35649
= $7129.80

2) Find the balance.
$35649 - 7129.80
= $28519.20

3) Find the interest in the balance.

Interest = $35649 x 22% x 6 /100
= $470.57

4) Find the total amount still owing.
  [Balance + interest]
Total amount = $28519.20 + $470.57
= $28989.77

5) Divide the total amount owing by number of months.

Monthly installment = $28989.77 / 72
= $402.64

* Monthly installment could be known as loans.