This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here are the solutions to the finance questions: 1.1 Step 1: Identify the total monthly payment and the portion allocated to airtime. Total monthly payment = R390 Monthly airtime allocation = R100 Step 2: Subtract the airtime allocation from the total monthly payment to find the payment for the handset only. Monthly payment for handset only = Total monthly payment - Monthly airtime allocation = R390 - R100 = R290 The monthly payment for the handset only is R290. 1.2 Step 1: Use the monthly payment for the handset only (from 1.1) and the contract duration. Monthly payment for handset only = R290 Contract duration = 24 months Step 2: Multiply the monthly handset payment by the number of months. Total paid for handset only = Monthly payment for handset only × Number of months = R290 × 24 = R6960 The total amount paid for the handset only over 24 months is R6960. 1.3 Step 1: Identify the cash price of the cellphone and the total amount paid for the handset over 24 months. Cash price of cellphone = R5 000 Total paid for handset only (from 1.2) = R6960 Step 2: Subtract the cash price from the total amount paid for the handset to find the interest added. Interest added = Total paid for handset only - Cash price = R6960 - R5000 = R1960 The interest added over the 24 months is R1960. 1.4 Step 1: Recall the simple interest formula and identify the known values. Simple interest formula: I = P · r · t Where: I = Interest added = R1960 (from 1.3) P = Principal (cash price) = R5000 t = Time in years = 24 months = (24)/(12) years = 2 years r = Annual simple interest rate (to be calculated) Step 2: Rearrange the formula to solve for r. r = (I)/(P · t) Step 3: Substitute the values and calculate the rate. r = R1960R5000 × 2 r = R1960R10000 r = 0.196 Step 4: Convert the decimal rate to a percentage. r = 0.196 × 100\% r = 19.6\% The annual simple interest rate is 19.6\%. That's 2 down. 3 left today — send the next one.