Question

Eustis purchased a living room set for $2,784 using a 12-month deferred payment plan. The interest rate after the introductory period is 24.90%. A down payment of $225 is required as well as a minimum monthly payment of $107. What is the balance after the introductory period if only the minimum payment is made until then? $1,990.18 $2,053.07 $3,167.18 $3,274.18

Answer 1

Answer:

$1,275

Step-by-step explanation:

The interest only takes effect after the first 12months so we begin by calculating all the expenses up until that point

Deposit = $225

Monthly payments = $107 * 12 = $1284

Total payments = $225 + $1284 = $1509

$2784 - $1509 = $1,275

Answer 2

Answer:

b) $2,053.07

Step-by-step explanation:

1) Finding the new balance of the living room set:

- B = P(1 + i)^nt

- B = 2784 (1 + 0249/12)^12 * 1

- B = 2784 ( 1.02075)^12

- B = 2784 (1.27947753)

- B = 3562.07

2) Add the down payment and minimum monthly payments:

- 225 + 107*12 = $1509

3) Subtract the sum of the down payment and minimum monthly from the new balance:

- 3562.07 - 1509 = $2053.07

Hope this helped!!