Question

Julio purchased some power tools totaling $2174 using a six-month deferred payment plan with an interest rate of 28.19%. He did not make any payments during the deferment period. What will the total cost of the power tools be if he must pay off the power tools within two years after the deferment period?

Answer 1

I believe you have to do a cross product formula.

2174/x = 28.19/100

Answer 2

Answer:

As deferment plan is 6 months and there are 24 months in 2 years.

28.19% of 2174=612.85

and we have to pay in 4 periods.Thus total interest =2451.40

Hence total cost of power tools that will be payed in 2 years will be 2174+2451.40=$4625.40