Question

Alex bought a new easy chair for $399. She bought it on the '12 months is the same as cash' plan. The contract stated that if not paid in 12 months, she would be assessed 14 percent

APR, dated from the first day of sale. If she pays it off on the thirteenth month, how much will she have to pay?
$454.86
$399
$798
$333.25
QUESTION 10
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Alex bought a new easy chair for $399. She bought it on the '12 months is the same as cash' plan. The contract stated that if not paid in 12 months, she would be assessed 14 percent
APR, dated from the first day of sale. If Alex wants to pay off the chair within the 12 months, so that she will not have to pay interest, how much should she budget for payment each
month?
$39.90
$33.25
$28.50
$25.50

Answer 1

$ 454.86 : $33.25

Explanation:

1.

Alex bought the new easy chair for $ 399 .

If she pays the amount in 13th month. So, she has to pay the interest of 1 month too , which is, = $
`\frac {399 * 14}{100}`

= $ 55.86

So, total amount she has to pay for the chair,

= (cost price of the chair + interest)

= $ (399 + 55.86)

= $ 454.86 (answer)

2.

If she wants to pay the amount within the 12 months, so that she doesn't have to pay the interest, her budget for that for each month will be ,

$
`\frac {399}{12}`

= $ 33. 25 (answer)