Question

Sheila purchased ski equipment for $513 using a six-month deferred payment plan. The interest rate after the introductory period is 18.39%. A down payment of $125 is required as well as a minimum monthly payment of $65. What is the balance at the beginning of the seventh month if only the minimum payment is made during the introductory period?

Answer 1

$65 * 6 = $390 total monthly payments made

The downpayment made is $125, so the total balance at the end is:

balance = $513 – ($125 + $390)

balance = - $2

 

There is an excess of 2 dollars at the end.