Question

Savannah took out a 5-year loan for $6500 at a furniture store to be paid back with monthly payments at a 17.3% APR. If the loan offers no payments for the first 21 months, how many payments will Savannah be required to make?

A.81
B.21
C.60
D.39

Answer 1

since they offer no loans for the first 21 months, cancel out C
A
B
D
are still somewhat possible
D is the answer

Answer 2

Option D is the right answer.

Explanation:

The loan amount - $6500

The APR is = 17.3%

The loan term is = 5 years or
`5*12=60` months

Now given is that the loan offers no payments for the first 21 months. This means Savannah will be required to make =
`60-21=39` payments.

Hence, the answer is 39 or option D.