Question

You purchase a computer for $875.00 plus 5% sales tax. You decide to finance it through the store's 0% program for 12 months. The terms state that you must pay $100.00/month and that if you miss a payment, you will be assessed a late fee of $39.00 plus the interest accrued to that point at a 14.25% APR. If you miss a payment in the eighth month, how much interest will you be charged?. A. $83.13. B. $16.63. C. $87.28. D. 58.19

Answer 1

Full price=875*1.05=918.75
Interest:
918.75*0.1425*(8/12)=
=130.92*(2/3)=
=87,28
C) $87.28

Answer 2

The answer is : C. $87.28

Explanation:

You purchase a computer for $875.00 plus 5% sales tax.

So, total price becomes :
`875+(0.05*875)` = $918.75

Monthly rate =
`14.25/12/100=0.011875`

So, 8 months rate =
`8*0.011875` = 0.095

So, when a payment is missed, the interest charged is =
`0.095*918.75`

= $87.28