Question

Bernie bought a refrigerator at a special sale. The refrigerator regularly sold for $986. No down payment was required. Bernie has to pay $69 per month for 1½ years. What is the average amount Bernie pays in interest each month?

Answer 1

$14.22

Explanation:

Bernie is paying the refrigerator at an installment basis, that is, for 1 and 1/2 years or 18 months. If he's paying $69 per month, let's solve the total amount that he'll be paying in 18 months.

$69 x 18 months = $1,242

Now that we know the total amount, we have to subtract the regular price of the refrigerator from the amount with interest in order to know the total amount of interest Bennie's going to pay in 18 months.

$1,242 - $986 = $256

Let's divide the amount into 18 months in order to get the interest per month.

$256 ÷ 18 = $14.22

Bernie pays the average amount of $14.22 as an interest each month.