Question

Rita charged $126 for a DVD player at an interest rate of 15.9%. How much will Rita have to pay after 2 months if she makes no payments?

Answer 1

I=prt. I=126(.159)(1/6) the time is always in years. I=20.034(1/6). I=3.339, round: I=3.34. Rita's interest is $3.34, her total payment is $129.34 :)

Answer 2

$ 129.34 will be the total payment made after two months if she made no initial payment

Explanation:

annual interest rate = 15.9 %

initial charge = $126

to get the annual interest paid = 15.9% of $126

= 0.159 * $126 = $20.03

monthly interest paid would be = annual interest / 12 months

= 20.03 / 12 = $1.67

hence in 2 months Rita will pay = initial charge + monthly interest * 2

= $126 + $ 1.67 *2 = $ 126 + $3.34

= $ 129 .34

Interest rates are always given an annual interest rate.