Interest

[GreekKoukla]

Hi-Decibels Auto Audio sells a stereo system for $400 down and monthly payments of $40 for the next 3 years. If the interest rate is 3% per month, find:
A) The cost of the stereo
B) Total amount of interest paid

I know the total amount I paid is 40*36=1440 + 400 = 1840
but that isn't the cost of the stereo, just the cost of the stereo plus interest.
but I don't know how to find the total interest I paid, without knowing the original cost of the stereo, and I can't use I=Prt because I don't know the principle. I'm so lost.

 

[Deleted member 4993]

Hi-Decibels Auto Audio sells a stereo system for $400 down and monthly payments of $40 for the next 3 years. If the interest rate is 3% per month, find:
A) The cost of the stereo
B) Total amount of interest paid

I know the total amount I paid is 40*36=1440 + 400 = 1840
but that isn't the cost of the stereo, just the cost of the stereo plus interest.
but I don't know how to find the total interest I paid, without knowing the original cost of the stereo, and I can't use I=Prt because I don't know the principle. I'm so lost.

What equation/s have you been taught regarding present value of annuities?