Amy purchased a $1,299 set of furniture on the installment plan. She

Question

paid 25% down. The finance charge on the remainder was 16.8%. She was
given 12 months to pay off the balance. What was her monthly payment?
a. $108.25
b. $94.83
c. $158.05
d. $126.44

Answer 1

First, we need to calculate the amount that Amy financed after her 25% down payment.

$1,299 x 0.25 = $324.75 (amount paid as down payment)

$1,299 - $324.75 = $974.25 (amount financed)

Next, we need to calculate the finance charge on the financed amount.

$974.25 x 0.168 = $163.91 (finance charge)

Now we can calculate the total amount Amy will pay back over the course of 12 months.

$974.25 + $163.91 = $1,138.16

To find her monthly payment, we divide the total amount by the number of months (12).

$1,138.16 ÷ 12 = $94.83

Therefore, the answer is b. $94.83.