Question

Martin buys a jet ski from a store offering 0% interest for 24 months. Calculate the average minimum monthly payment he should make to avoid paying deferred interest charges for the $6,500 watercraft.

Answer 1

$270.83.

Explanation:

We have been given that Martin buys a jet ski from a store offering 0% interest for 24 months. This means if he pays monthly payment he will not be charged with any interest for 24 months.

Since Martin will make 24 payments in 24 months, so payment for each month can be found by dividing total cost of watercraft ($6500) by 24.

`\text{Minimum monthly payment}=(\$6500)/(24)`

`\text{Minimum monthly payment}=\$270.833`

Therefore, Martin should make a monthly payment of $270.83 to avoid paying deferred interest charges for the $6,500 watercraft.