0 for 24 Months: Nothing Down Worksheet Answers
Are you struggling to understand the concept of 0% financing for 24 months with no down payment? Do you need help with a worksheet that involves calculating the total cost of a purchase with this financing option? Look no further! In this article, we will provide you with the answers to common worksheet questions and a step-by-step guide on how to calculate the total cost.
What is 0% Financing for 24 Months with No Down Payment?
0% financing for 24 months with no down payment is a financing option that allows you to purchase an item without paying any interest or down payment for 24 months. This financing option is often offered by retailers or manufacturers to promote sales of their products.
Worksheet Example
Suppose you want to purchase a new TV that costs $1,500 with 0% financing for 24 months and no down payment. The worksheet may ask you to calculate the total cost of the TV after 24 months.
Calculation
To calculate the total cost, you need to understand the concept of amortization. Amortization is the process of spreading out the cost of an asset over a period of time. In this case, the cost of the TV is spread out over 24 months.
Here's the step-by-step calculation:
- Monthly Payment: Divide the cost of the TV ($1,500) by the number of months (24) to get the monthly payment.
$1,500 ÷ 24 = $62.50 per month
- Total Cost: Multiply the monthly payment by the number of months to get the total cost.
$62.50 per month × 24 months = $1,500
Answer: The total cost of the TV after 24 months is $1,500.
Other Scenarios
What if the financing option has a higher or lower interest rate? How would that affect the total cost? Let's explore some other scenarios:
Scenario 1: 5% Interest Rate
If the financing option has a 5% interest rate, the monthly payment would be higher.
$1,500 × 5% = $75 per month
The total cost would be:
$75 per month × 24 months = $1,800
Scenario 2: 0% Interest Rate with a Down Payment
If you put a 10% down payment ($150) and finance the remaining amount with 0% interest for 24 months, the calculation would be:
$1,350 (remaining amount) ÷ 24 months = $56.25 per month
The total cost would be:
$56.25 per month × 24 months = $1,350 + $150 (down payment) = $1,500
Conclusion
Calculating the total cost of a purchase with 0% financing for 24 months and no down payment requires an understanding of amortization and basic arithmetic operations. By following the steps outlined in this article, you can easily calculate the total cost of a purchase and make informed decisions about your financing options.
