Financial Mathematics • Topic 6 of 6

Installments

Buying on installments means paying for something in a series of equal, regular payments rather than all at once. The total amount paid is simply the number of payments times the size of each payment. A phone paid off in 8 monthly installments of $50 costs 8 × 50 = $400 in total. If the installment plan total is more than the cash price, the extra is the cost of paying over time. These problems are mostly careful multiplication, sometimes followed by a comparison with an upfront price. The SAT keeps the numbers tidy, so the key is identifying the number of payments and the per-payment amount correctly.

A row of eight equal bars, each one payment, with a brace below showing they sum to the totalInstallments$50$50$50$50$50$50$50$508 equal paymentsTotal $400Total = number of payments × payment

✅ Solved examples

1. A phone is paid in 8 monthly installments of $50. Total paid?
8 × 50 = $400.
2. A TV is paid in 12 installments of $75. Total?
12 × 75 = $900.
3. A laptop costs $600 cash or 10 payments of $70. Extra cost of the plan?
Plan 700; extra 700 − 600 = $100.
4. A bike is paid in 6 installments of $40. Total?
6 × 40 = $240.

✏️ Practice — try these, take hints as needed

1. A camera is paid in 5 installments of $60. Total paid?
Payments × amount.
5 × 60.
—
$300.
2. A sofa is paid in 9 installments of $100. Total?
9 × 100.
—
—
$900.
3. A fridge costs $800 cash or 12 payments of $75. Extra cost of the plan?
Plan total = 900.
900 − 800.
—
$100.
4. A watch is paid in 4 installments of $45. Total?
4 × 45.
—
—
$180.
5. A console is paid in 10 installments of $50. Total?
10 × 50.
—
—
$500.

📝 Topic test — 8 questions

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