Nazir saved $900 to buy a plasma TV. He borrowed the rest at an interestrate of 18%/a compounded monthly. Two years later, he paid $1429.50 forthe principal and the interest. How much did the TV originally cost? please include steps thank you
Let P be the amount Nazir borrowed, monthly interest rate = 18/12 = 1.5% or 0.015 and number of interest periods in 2 yrs = 24 months As we know A = P*(1 + r)^n ; we know A = $1429.50 , r = 0.015, n = 24 1429.50 = P*(1 + 0.015)^24 P = 1429.50 / (1.015)^24 P = 1429.50 / 1.42950 P = 1000 Therefore Nazir borrowed $1,000 and since he already had $900 hence total cost of TV would have been $1,900
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