A certain company has purchased new swivel chairs for its employees. The company made the purchase on a credit plan at Buy Right. Their monthly payments are $1,000 for 2 years. Buy Right will charge 3.45% per year compounded monthly. How much was the original total price of the furniture?

Original price= $23,158.58

Explanation:

Giving the following information:

The company purchased a credit plan at Buy Right. Their monthly payments are $1,000 for 2 years. Buy Right will charge 3.45% per year compounded monthly.

First, we need to calculate the final value, using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= monthly pay= 1,000

i= 0.0345/12= 0.002875

n= 12*2= 24

FV= {1,000*[(1.002875^24) - 1]}/ 0.002875

FV= $24,810.48

Now, we can calculate the original price:

PV= FV/(1+i)^n

PV= 24,810.48/ (1.002875^24)

PV= $23,158.58

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