Question

You purchase a computer for $875.00 plus 5% sales tax. You decide to finance it through the store's 0% program for 12 months. The terms state that you must pay $100.00/month and that if you miss a payment, you will be assessed a late fee of $39.00 plus the interest accrued to that point on the initial amount at a 14.25% APR. If you miss a payment in the eighth month, how much interest will you be charged?
(1 point)
Responses

$83.13
$83.13

$16.63
$16.63

$87.28
$87.28

$58.19

Answer 1

Initial amount = 875 + 5% = 875(1.05) = 918.75.

Interest = 918.75 × 0.1425 × (8/12) = 918.75 × 0.1425 × 0.6666667 = 87.28125 ≈ $87.28.

Answer: $87.28