Find Difference in Total Cost for Engagement Ring at 2 Jewelers

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SUMMARY

The discussion focuses on calculating the total cost of an engagement ring from two different jewelers. The first jeweler requires a 20% down payment and charges 11% simple interest on the remaining balance, resulting in a total cost of $2611.20. The second jeweler requires a 25% down payment with a 12% simple interest, leading to a total cost of $2616. The difference in total cost between the two jewelers is $4.80. Additionally, the discussion addresses calculating the original amount of a bill after a 1.5% late payment interest charge, confirming the original amount as $328.

PREREQUISITES
  • Understanding of simple interest calculations
  • Familiarity with percentage calculations
  • Basic financial literacy regarding down payments
  • Ability to solve algebraic equations
NEXT STEPS
  • Learn more about calculating total costs with varying interest rates
  • Research different types of interest (simple vs. compound)
  • Explore financial planning tools for budgeting large purchases
  • Study the implications of down payments on loan agreements
USEFUL FOR

This discussion is beneficial for prospective buyers of jewelry, financial students, and anyone interested in understanding the impact of interest rates and down payments on total costs.

bergausstein
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1. A prospective bridegroom wants to buy an engagement
ring. Two jewelry stores each show him a ring at a cost
of \$2400. One jeweler requires a 20% down payment
with the balance to be paid at the end of one year at 11%
simple interest. The other jeweler requires a 25% down
payment with the balance to be paid at the end of one
year at 12% simple interest. What is the difference in
total cost?

my solution,

for the first jeweler

$.20(2400)=480$ \$480 down payment

$2400-480=1920$ \$1920 balance to be paid(with 11% interest)

then the total cost is,

$1920(.11)+1920+480=2611.2$

\$ 2611.2 total cost of the ring at the first jewelry store.

for the 2nd jewelry store,

$.25(2400)=600$ \$600 down payment

$2400-600=1800$ \$1800 balance to be paid(with 12% interest)

then the total cost is,

$1800(.12)+1800+600=2616$

\$ 2616 total cost of the ring at the 2nd jewelry store.

so, $2616-2611.2=4.8$ \$4.8 is the difference in the total cost.

did i get it correctly?

2. Because payment is one month overdue, a customer
receives a department store bill for \$332.92 that includes
a 1.5% interest charge for late payment. What was the
original amount of the bill?

my solution

$332.92-332.92(0.015)=327.9262$

\$327.9262 original price.

is this also right?

thanks!
 
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bergausstein said:
1. A prospective bridegroom wants to buy an engagement
ring. Two jewelry stores each show him a ring at a cost
of \$2400. One jeweler requires a 20% down payment
with the balance to be paid at the end of one year at 11%
simple interest. The other jeweler requires a 25% down
payment with the balance to be paid at the end of one
year at 12% simple interest. What is the difference in
total cost?

my solution,

for the first jeweler

$.20(2400)=480$ \$480 down payment

$2400-480=1920$ \$1920 balance to be paid(with 11% interest)

then the total cost is,

$1920(.11)+1920+480=2611.2$

\$ 2611.2 total cost of the ring at the first jewelry store.

for the 2nd jewelry store,

$.25(2400)=600$ \$600 down payment

$2400-600=1800$ \$1800 balance to be paid(with 12% interest)

then the total cost is,

$1800(.12)+1800+600=2616$

\$ 2616 total cost of the ring at the 2nd jewelry store.

so, $2616-2611.2=4.8$ \$4.8 is the difference in the total cost.

did i get it correctly?

Hello.

Yes.

bergausstein said:
2. Because payment is one month overdue, a customer
receives a department store bill for \$332.92 that includes
a 1.5% interest charge for late payment. What was the
original amount of the bill?

my solution

$332.92-332.92(0.015)=327.9262$

\$327.9262 original price.

is this also right?

thanks!

Not.

Supposing that 1,50 % is the total interest for the month of delay:

P=original price

P+\dfrac{1.5}{100} P=1.015 \ P=332.92

P=\dfrac{332.92}{1.015}=328Checking:

328+328 \dfrac{1.5}{100}=328+4.92=332.92

Regards.