Question
Sharon purchased a sprinkler system for $1,950 using a six-month deferred payment plan. The interest rate after the introductory period is 23.99%. No down payment is required, but there is a minimum monthly payment of $25. What is the balance at the beginning of the seventh month if only the minimum payment is made each month during the introductory period?
A $2,045.91
B $1,950.00
C $2,195.91
D $1,800.00
my answer is d because the interest hasn't started yet
A $2,045.91
B $1,950.00
C $2,195.91
D $1,800.00
my answer is d because the interest hasn't started yet
Answers
I agree,
but then pay this off as quickly as possible with such a high interest rate.
Notice the payment of $25 wouldn't even pay the interest.
(first months interest after introductory period
= 1800(.2399)(1/12) = $35.99
but then pay this off as quickly as possible with such a high interest rate.
Notice the payment of $25 wouldn't even pay the interest.
(first months interest after introductory period
= 1800(.2399)(1/12) = $35.99
Related Questions
A car is purchased for $9,192.57 with $1470 down and a loan to be repaid at $200 a month for 2 years...
Susannah purchased ski equipment for $978 using a six-month deferred payment plan. The interest rate...
Bart made some home improvements for $6,091 using a six-month deferred payment plan with an interest...
Julio purchased some power tools totaling $2,174 using a six-month deferred payment plan with an int...