you buy a stove. If the price of 78699 is cash a) How much will you pay each month if the rate charged is 12% per year, compounded monthly and you wish to pay in one year? b) If you decide to save a year before purchasing the product and be able to buy it in cash, how much should you save monthly considering the same interest rate and its monthly capitalization?
Added by David C.
Step 1
To do this, we need to convert the annual interest rate of 12% into a monthly rate. We do this by dividing the annual rate by the number of months in a year (12). Monthly interest rate = 12% / 12 = 1% or 0.01. Show more…
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