Explain simply why 520 is the correct answer to: Tara has been planning to buy a laptop which costs $1000. A computer shop accepts payment in installments of $65 per month provided that a 20% down payment is made. If Tara wants to pay an additional $20 for the down payment, how much will her balance be after paying for 4 months?. Explanation:
Tara has to make a $1000 x 20 / 100 = $200 down payment. Since Tara wants to pay $20 more for the down payment, her total down payment will be $200 + $20 = $220. So her remaining balance payable over a year is $1000 - $220 = $780. Tara has to make a monthly payment of $780 / year / 12 months / year = $65 / month. The total cost of her payments for 4 months is $65 / month x 4 months = $260. Therefore, Tara's balance after 4 months is $780 - $260 = $520.