# How Much Did Each Computer Cost Before Finance Charges?

• MHB
• jesspowers526
In summary, "finding costs prior to finance charges" means determining the original cost of an item before any additional charges are added. It is important to know this cost for a more accurate understanding of the total amount being paid and for budgeting and comparing financing options. To find the cost of a computer before finance charges, you will need to know the original purchase price, fees, and interest rate. Factors that can affect the cost include the purchase price, fees, financing period, and interest rate. It is possible to negotiate finance charges with the lender, so it's important to compare offers and negotiate for the best terms and rates.
jesspowers526
Jim bought a desktop computer and a laptop computer. Before finance charges, the laptop cost \$150 more than the desktop. He paid for the computers using two different financing plans. For the desktop the interest rate was 7% per year, and for the laptop it was 5.5% per year. The total finance charges for one year were \$227.

How much did each computer cost before finance charges?

Last edited by a moderator:
Hello, and welcome to MHB! (Wave)

I re-titled your thread so that the title reflects the question being asked. So, let's walk through this problem.

jesspowers526 said:
Jim bought a desktop computer and a laptop computer.

Let's let $$D$$ be the cost of the desktop computer and $$L$$ be the cost of the laptop computer. These costs will be in dollars.

jesspowers526 said:
Before finance charges, the laptop cost \$150 more than the desktop. From this, we may write: $$\displaystyle L=D+150$$ jesspowers526 said: He paid for the computers using two different financing plans. For the desktop the interest rate was 7% per year, and for the laptop it was 5.5% per year. So, the finance charge for the desktop is $$0.07D$$ and the finance charge for the laptop is $$0.055L$$. jesspowers526 said: The total finance charges for one year were \$227.

This allows us to write:

$$\displaystyle 0.07D+0.055L=227$$

I would first multiply this equation by 1000 to get rid of the decimals:

$$\displaystyle 70D+55L=227000$$

Now divide by 5:

$$\displaystyle 14D+11L=45400$$

jesspowers526 said:
How much did each computer cost before finance charges?

We have two unknowns, which are what we're being asked to find, and two equations, so we may determine a unique solution. I would use the first equation to substitute for $$L$$ into the second equation, giving us an equation in $$D$$ alone, which we can then solve:

$$\displaystyle 14D+11(D+150)=45400$$

Distribute:

$$\displaystyle 14D+11D+1650=45400$$

Combine like terms:

$$\displaystyle 25D=43750$$

Divide by 25:

$$\displaystyle D=1750$$

Now, we may use the first equation to find $$L$$:

$$\displaystyle L=D+150=1750+150=1900$$

Thus, we have determined the cost of the desktop computer is \$1750 and the cost of the laptop computer is \$1900. Does all of that make sense?

1.

## What does "finding costs prior to finance charges" mean?

"Finding costs prior to finance charges" refers to the process of determining the original cost of an item before any additional charges, such as interest or fees, are added to the total amount.

2.

## Why is it important to know the cost prior to finance charges?

Knowing the cost of an item before finance charges allows for a more accurate understanding of the total amount being paid. It also helps in budgeting and comparing different financing options.

3.

## How can I find the cost of a computer before finance charges?

To find the cost of a computer before finance charges, you will need to know the original purchase price, any applicable fees, and the interest rate. You can then use a simple interest formula to calculate the total cost.

4.

## What factors can affect the cost prior to finance charges?

The cost prior to finance charges can be affected by the original purchase price, any additional fees or charges, the duration of the financing period, and the interest rate.

5.

## Is it possible to negotiate the finance charges?

Yes, it is possible to negotiate finance charges with the lender. It's important to compare offers from different lenders and negotiate for the best terms and rates before making a decision.

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