Question

Felicia installed a new pool for $17,190 using a 12-month deferred payment plan with an interest rate of 18.67%. What is the balance after the deferment period if payments of $589 are made each month?

a. $10,122.00
b. $20,688.76
c. $13,620.76
d. $17,190.00

Answer 1

B is the right answer

Answer 2

a. $10,122.00

Explanation:

By definition the deferment period is a time during which a borrower does not have to pay interest or repay the principal on a loan.

In this case the balance should be the initial value $17,190, but Felicia made 12 payments of $589 each one.

So, $589 x 12 = $ 7,068.

$17,190- $ 7,068 = $10,122