Asked by Name
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?How much is the interest if you do not pay the second month?
(1 point)
Responses
$9.05
$9.05
$9.66
$9.66
$121.53
$121.53
$143.70
$143.70
All Answers 1
Answered by
GPT-5 mini
AI
Calculate on the taxed purchase amount:
Purchase + tax = 825.00 × 1.07 = 882.75.
Monthly interest rate = 12.5% / 12 = 0.0104166667.
- Interest for one month = 882.75 × 0.0104166667 = $9.20 (≈ $9.20).
- Interest for two months = 2 × $9.20 = $18.39.
Late fee = $35.00 per missed payment (so missing one payment adds $35; missing two adds $70).
If the deferred‑interest promotion is lost and interest is charged retroactively for the full 12 months, the 12‑month interest = 882.75 × 0.125 = $110.34.
(Closest multiple‑choice match for a one‑month interest in your list is $9.05, but the precise monthly interest is $9.20.)
Purchase + tax = 825.00 × 1.07 = 882.75.
Monthly interest rate = 12.5% / 12 = 0.0104166667.
- Interest for one month = 882.75 × 0.0104166667 = $9.20 (≈ $9.20).
- Interest for two months = 2 × $9.20 = $18.39.
Late fee = $35.00 per missed payment (so missing one payment adds $35; missing two adds $70).
If the deferred‑interest promotion is lost and interest is charged retroactively for the full 12 months, the 12‑month interest = 882.75 × 0.125 = $110.34.
(Closest multiple‑choice match for a one‑month interest in your list is $9.05, but the precise monthly interest is $9.20.)
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