Question 1 Chen hopes to eventually replace his old bicycle with a new one. The type of bicycle he wants has a cash price of $2400. Chen could enter into an agreement to buy one of these bicycles from...

Extracted text: Question 1 Chen hopes to eventually replace his old bicycle with a new one. The type of bicycle he wants has a cash price of $2400. Chen could enter into an agreement to buy one of these bicycles from a supplier where he pays a deposit of $400 and 24 monthly payments of $120. A flat rate of interest applies. а. What would be the best way to describe Chen's agreement: reducing balance loan, interest-only loan, hire purchase, cash payment? b. What is the total cost of the bicycle under this agreement? C. How much money would Chen actually borrow under this agreement and how much interest would he pay? d i Write down the simple interest formula and change the formula so that the rate r is the subject. ii Find the annual flat rate of interest that applies to Chen's agreement. (Give your answer as a percentage). iii Suppose that Chen could negotiate a discount with the supplier so that his payments are reduced to $105 per month for 24 months. Determine the annual flat rate of interest (as a percentage) under these new conditions.