Question

Your original purchase price was $825.00 plus 7% sales tax. You enter into an agreement where the interest (12.5% APR) is waived for the first 12 months provided you make the required monthly payments; otherwise the interest is accrued from the date of purchase. You miss the first payment due date. The late fee is $35.00. How much is the interest?
(1 point)
Responses

$103.13
$103.13

$110.34
$110.34

$8.59
$8.59

$9.20
$9.20

Answer 1

First compute total purchase with tax: 825 + 0.07(825) = 882.75.
Monthly interest = 882.75 × (12.5% / 12) = 882.75 × 0.0104167 ≈ 9.19 → $9.20.