Question

Sonia purchased a pool for $2,150 using a six-month deferred payment plan. The interest rate after the introductory period is 27.99%. No down payment is required, but there is a minimum monthly payment of $35. What is the balance at the beginning of the seventh month if only the minimum payment is made each month during the introductory period? (4 points)
Select one:
a. $2,468.99
b. $1,940.00
c. $2,150.00
d. $2,258.99

Answer 1

The correct answer is D. $2,258.99

Answer 2

Answer:

Option D is correct.

Step-by-step explanation:

Sonia purchased a pool for $2,150 using a six-month deferred payment plan.

No down payment is required, but there is a minimum monthly payment of $35.

So, payments made in 6 months = $35\times6$ = $210

Now, compound interest is found as:

$A=p(1+\frac{r}{n})^{nt}$

Here p = 2150

r = 27.99% or 0.2799

n = 12

t = 1/2 = 0.5

Substituting the values in formula we get;

$A=2150(1+\frac{0.2799}{12})^{12*0.5}$

=> $A=2150(1.023325)^{6}$

A = $2468.99

Balance = $2468.99-210$ = $2258.99

Therefore, the answer is option D.